In Spain 1519, two wanted con artists, Miguel and Tulio, win a map purportedly to the city of gold, El Dorado along with a large number of other valuables by cheating at a game of dice (though the map itself was won fairly). Chased by an angry bull and the city's guards, the two inadvertently hide themselves on the ship belonging to Hernán Cortés and his troops as they set off to the New World. They manage to escape to a rowboat, inadvertently bringing along Cortés' horse, Altivo, and eventually end up ashore on the New World, where Miguel recognizes landmarks shown on the map. The three follow the map and end up where the map marks the entrance to El Dorado, but find only an enscribed monolith waiting for them. As they try to determine what to do next, a young tribal woman is chased by a group of guards, and Miguel and Tulio step in to protect her. The guards believe the two to be gods as shown on the monolith, and escort them along with the woman along a river cavern to El Dorado, truly a city made out of gold.
Miguel and Tulio are introduced to the city's elders, Chief Tannabok and high priest Tzekel-Kan. After appearing to stop the eruption of a nearby volcano by their words only, Miguel and Tulio are proclaimed to be gods despite Tzekel-Kan's suspicions, and are treated luxuriously. The woman they rescued from the guards, Chel, offers to be their assistant as to avoid punishment for attempting to steal gold from the city. After the night of a feast prepared by Chief Tannabok to honor them, Miguel and Tulio are shocked to find that Tzekel-Kan is ready to offer a live sacrifice, and insist that it be stopped, stating they will take the gold instead as their tribute. The two quickly conceive of a plan, and convince Chief Tannabok to build them a boat over the next few days so that the "gods" may return along with their tribute. While Tulio plans to wait out those days in their provided villa, Chel urges Miguel to go explore the city, allowing her to get romantically closer to Tulio.
Tzekel-Kan, finding Miguel playing ball with children in the streets, organizes a Mesoamerican ballgame match between them and the city's best players in the hopes that they will prove skilled enough to provide a modest challenge to the two. Miguel and Tulio quickly find themselves outmatched until Chel replaces the ball with a rolled-up armadillo that allows them to cheat and win the game. However, Tzekel-Kan catches a small cut on Miguel's forehead and is finally convinced that they are not gods. Tzekel-Kan brings to life a giant stone jaguar statue and chases Miguel and Tulio around the city to the edge of a cliff overlooking a giant whirlpool. Miguel and Tulio use their con tactics to fake an argument, and in the resulting chaos, both Tzekel-Kan and the jaguar statue fall into the whirlpool; when he emerges from the whirlpool, Tzekel-Kan finds himself far outside El Dorado at the feet of Cortés and his men, and quickly offers to show them the way to El Dorado in order to save his life.
Though Miguel and Tulio are safe, the two realize they want to go separate ways, with Tulio desiring to leave the city along with Chel and the gold, while Miguel opts to stay along with Altivo. They'll both get what they want, but they know they will miss each other. With the boat completed, Tulio and Chel prepare to depart and say their tearful goodbyes to Miguel and the people of the city, but Tulio then spots smoke on the horizon, and deduces that Cortés' is approaching the city, and that the people of El Dorado cannot defend against his forces. Tulio comes up with a plan to collapse the pillars supporting the river cavern with the boat, propelled by a large wave created by the cityfolk toppling a large statue at the river's mouth, as to seal the entrance to El Dorado forever and keeping its population safe. As Tulio and Chel depart, their sails fail to work correctly to allow the boat to clear the falling statue; Miguel forgoes his chance to stay in the city to jump onto the boat with Altivo's help and fix the sails, allowing the boat to clear the statue. Tulio's plan works as expected, though the boat and all their gold is lost as it collapses the pillars. As the wave deposits them by the monolith, they are met by Cortés and his army and Tzekel-Kan. When they discover there is no passage to the city any longer, Cortés and his men capture Tzekel-Kan and depart. Tulio, Miguel, and Chel reunite, and while disappointed about losing the gold, are happy to be alive and friends again, and they set off on Altivo—still clad in golden horseshoes—towards their next adventure.