The Doctor and Leela travel to Victorian London so Leela can learn about the customs of her Earth ancestors. For this, she has to put on clothing. The stage magician Li H’Sen Chang (John Bennett) is performing at the Palace Theatre. On the way to the theatre, they run across a group of Chinese men killing a cabdriver. They attempt to silence the Doctor and Leela but are frightened by a police whistle. One assailant does not escape (because Leela has messed him up) and is brought to the station with the time-travellers.
At the station, Leela demands that the prisoner be tortured for information, but nobody listens. Li H’sen Chang is brought in as an interpreter, but he is secretly the leader of the gang and gives a scorpion venom pill to the captive, who dies instantly. When the Doctor examines the body, he finds a scorpion tattoo—sign of the Tong of the Black Scorpion, worshippers of an ancient god named Weng-Chiang.
The body goes to the local mortuary, along with the body of the cabdriver, found in the river. At the mortuary, they meet Professor Litefoot (Trevor Baxter). The cabbie is Joseph Buller (Alan Butler), who had been looking for his wife Emma, one of many women gone missing in the area. Buller had gone to the theatre to confront Chang, who sent the tiny Mister Sin (Deep Roy) to kill him. Chang serves Magnus Greel (Michael Spice), a despot from the 51st Century who has escaped from the authorities in a time cabinet to masquerade as the god Weng-Chiang. The zygma energy of the time-cabinet has disrupted Greel’s DNA and he is deformed behind his steel mask. He must drain the life-essence from young women to stay alive. He is also searching for his cabinet, seized by Chinese authorities and given to Professor Litefoot’s family. Mister Sin is from the future too, but is a robotic toy called the Peking Homunculus.
Greel steals the cabinet from Professor Litefoot. The Doctor and theatre owner Henry Gordon Jago (Christopher Benjamin) track him to the sewers beneath the theatre, but Greel is already gone. Chang escapes as well but is attacked by one of Greel’s giant rats. Jago finds a bag of future artefacts, including the key to the cabinet. He takes these items to Litefoot’s house for the Doctor. Jago and Litefoot are taken. The Doctor and Leela find Chang dying of his injuries in an opium den, Chang tells them they can find Greel in the House of the Dragon, but not where it is located.
They return to Litefoot’s house, where they find the key to the time-cabinet. When Greel arrives to take it, the Doctor tries to use the trionic lattice key as a bargaining chip. If Greer releases Litefoot and Jago and takes the Doctor to the House of the Dragon, he will give Greel the key. Unfortunately, Greel overpowers the Doctor and locks everyone up. Leela has followed them and confronts Greel. She is put in his life-essence catalytic extraction chamber. But the Doctor and the others save her. The doctor convinces the homunculus Mister Sin that Greel escaping in the cabinet will create a catastrophic implosion, and Mister Sin turns on Greel, shooting at him. The Doctor pushes Greel into his own extraction chamber. The machine overloads, Greel suffers cellular collapse and disintegrates. Enraged, Mister Sin attacks Leela. But the Doctor pulls its fuse and destroys the lattice. Litefoot and Jago watch the TARDIS dematerialize and wonder how the Doctor managed the stage-trick.
Various parts of contemporary London stood in for Victorian streets, including one where someone had parked his modern Porsche and couldn’t be found, so they put a tarp over it and piled on horse-manure until it looked like something Victorians would have seen every day. They filmed several scenes in the Royal Theatre of Northampton. The series was a great success as a kind of grand guignol variation on the Phantom of the Opera. It was voted the best Doctor Who story. But it was criticized for the unfortunately silly giant rats and the obvious racism. TVOntario and a few American stations refused to air it. Jago and Litefoot were such a popular pair that they almost got a series of their own and did appear in an audio series. Leela got to knife-fight, crash through a window, chase down a carriage in the street, and crawl through the sewers in Victorian underwear pursued by giant rats. The Doctor dressed like Sherlock Holmes the whole time.