The Straw Hat Pirates receive a message in a bottle advertising Omatsuri Island, a luxurious resort in the Grand Line where the strongest pirates are welcome to relax. Enticed by the promise of spas, feasts, and fun, Monkey D. Luffy and his crew eagerly set course for the island.

Upon arrival, they are greeted by the island's flamboyant and eccentric owner, Baron Omatsuri, who is accompanied by a large, festive party of performers. However, the Baron refuses to let them enjoy the amenities until they prove their worth by completing a series of brutal challenges known as the Trials of Hell. Despite the crew's hesitation, an excited Luffy accepts the challenge. The first trial, a rigged game of goldfish catching, is barely won by the Straw Hats, which enrages the Baron and forces them into a second trial.

While the crew competes, the ever-curious Nico Robin and Tony Tony Chopper begin to explore the island, finding it strangely deserted. Robin questions one of the Baron's crewmates about a mysterious flower, the Lily Carnation, while Chopper stumbles upon a vast graveyard of pirate ships and learns a chilling warning about the Baron’s true intentions. As the second trial concludes, rifts begin to grow between the normally unshakeable crew members. One by one, Chopper, Usopp, and Robin go missing, and paranoia and blame fracture the group's trust.

It is revealed that Omatsuri Island is a deadly trap. The Lily Carnation, a flower of reincarnation that grows at the island's summit, has the power to bring the dead back to life as plant-like constructs. Years ago, Baron Omatsuri was the captain of the Red Arrows Pirates, but he lost his entire crew in a terrible storm. Washing ashore on the island alone and mad with grief, he made a pact with the Lily Carnation, using its power to create false, living replicas of his beloved crew from his memories. To sustain the flower and maintain his illusions, the Baron lures pirate crews to the island with false promises, forcing them through the trials to break their spirits before feeding them to the Carnation.

In the film's climax, the Baron captures the remaining Straw Hats and attempts to feed them to the Lily Carnation. Luffy, having learned the truth from other stranded pirates hiding on the island, fights the Baron in a desperate and emotionally traumatizing battle. After a grueling struggle, Luffy defeats the Baron and, with the help of other captive pirates, destroys the Lily Carnation. As the flower dies, its illusions vanish, and Baron Omatsuri is finally reunited with the spirits of his true crewmates, who forgive him and encourage him to let go of his grief. The Straw Hat Pirates reappear unharmed, with no memory of the horrific events, and gather around an exhausted but smiling Luffy as they prepare to leave the now-barren island behind.