When white settlers encroach on Indian lands, the Assiniboins declare war on the settlers. Apache chief Winnetou vows to help keep the peace between whites and natives. He saves the daughter of the Assiniboin chief and in return he asks for the lives of three troopers held captive by the tribe. Among the three captives is Lt. Robert Merril, son of fort commander Col. J.F. Merril. Meanwhile, crooked oilman Bud Forrester schemes to start a war between the Army and the natives. Forrester sends his men to attack wagon trains and settlements and he blames the Indians. By starting a conflict between Indians and the Army, Forrester hopes to grab Indian land that is rich in oil. Frontier scout Old Shatterhand, Apache chief Winnetou and British adventurer Lord Castlepool join forces in an attempt to stop oilman Bud Forrester from succeeding with his evil plan. Also, fort commander Col. J.F. Merril offers his assistance to Winnetou in hunting down of those responsible for the latest attacks and massacres of white settlements. The Colonel's son even offers to marry the daughter of the Assiniboin chief, in order to prove the goodwill of the Army to maintain the peace between whites and Indians. Unfortunately, greedy oilman Bud Forrester makes yet another unexpected aggressive move that could ruin everything.