The book tells the adventures of five Americans on an uncharted island in the South Pacific. The story begins in the American Civil War, during the siege of Richmond, Virginia, the capital of the Confederate States of America. As famine and death ravage the city, five northern prisoners of war decide to escape by the unusual means of hijacking a balloon.
The secret of the island is revealed when it is discovered to be Captain Nemo's hideout, and home port of the Nautilus. Having escaped the Maelstrom at the end of Twenty Thousand Leagues Under the Sea, the Nautilus sailed the oceans of the world until all its crew except Nemo had died. Now an old man with a beard, Nemo returned the Nautilus to its secret port within Lincoln Island. Nemo had been the savior of the heroes, providing them with the box of equipment, sending the message revealing Ayrton, planting the mine that destroyed the pirate ship, and killing the pirates with an "electric gun". On his death bed Captain Nemo reveals his true identity as the lost Indian Prince Dakkar, son of a Raja of the then independent territory of Bundelkund and a nephew of the Indian hero Tippu-Sahib.