Margaret Thornton, [Hazel Court], and her husband Guy Thornton, [Dermot Walsh], are a newlywed couple who decide to renovate the steam yacht Cyclops as their home. Before the sale, the Yard Manager recounts the ship’s lore: after the war, Prof. Martineau, [John Robinson], an atomic scientist, bought the Cyclops and outfitted it with gadgets like automatic gyro steering. Martineau, his wife, Joan Carol as Mrs. Martineau, and their engineer Hugh Latimer Peter, sailed for Deauville but never arrived. When the Cyclops lost contact, it was presumed they struck a mine. A month later, fishermen found the yacht abandoned. An inquiry revealed it had been deserted for three days with the equipment in perfect condition, no distress signals sent, and one lifebuoy missing. A body was found onshore, but Martineau’s housekeeper said it was not him due to the absence of a burn scar on the arm. The inquiry concluded two must have drowned trying to save the third.
The Yard Manager warns Guy and Margaret that the Cyclops has changed hands many times, never staying with one owner for long, and hints at a haunting, having smelled cigar smoke aboard. Guy suspects the manager is reluctant to sell because of smuggling operations. The couple buys the Cyclops and begins an overhaul. Unable to find a local deckhand, Guy hires Mansel, who dismisses the haunting rumors and had poorly maintained the yacht for years. At their housewarming party aboard the Cyclops, a guest mentions smelling a cigar. That night, the engineer quits, claiming his wife is ill, though the Yard Manager later casts doubt, suggesting a ghost sighting caused his departure.
Guy hires a new engineer, but Margaret complains about cigar smoke in their quarters. When Guy confronts the engineer, he quits, claiming to have seen a ghost as well. Later, Margaret receives a phone call from the bridge with only breathing on the line, but Guy and Mansel are both unavailable. Investigating, the couple finds the bridge empty, though Margaret faints after again smelling cigar smoke. She begins to believe in a supernatural presence, but Guy remains skeptical, thinking someone is trying to scare them off the Cyclops. While working in the engine room, Guy briefly sees a man smoking a cigar who vanishes when challenged. Debating whether to sell the yacht, Margaret contacts the Institute for Investigation of Psychic Phenomena and hires Dr. Fawcett, a paranormal investigator, [Hugh Burden].
Dr. Fawcett senses a strong psychic presence aboard, also noticing the smell of cigar smoke, though Guy remains doubtful. He invites a medium, Mrs. Manley, to hold a séance, [Mignon O'Doherty]. During the séance, they uncover that Martineau’s wife and Peter were having an affair and plotted to kill Martineau and throw him overboard. Martineau, overhearing the plan after breaking the bridge phone, confronted and shot them both, hiding their bodies in a disused water tank beneath the floor. Martineau then took money, altered the yacht’s course, and jumped overboard with a lifebuoy. Guy and Dr. Fawcett locate the water tank and confirm the story, but before they can notify the police, Mansel commits suicide on deck. Realizing Mansel had a burn scar on his arm, Guy concludes Mansel was actually Professor Martineau. Dr. Fawcett reassures Guy that now Martineau is dead, the haunting should cease. Relieved, Guy and Margaret set sail on the Cyclops.
