During the First World War, two American soldiers become trapped in no man's land. Expecting to die, W. Dangerfield Phelps III decides to fulfill his fondest desire: to beat up his sergeant since training camp, Peter O'Gaffney. While they are brawling, the Germans sneak up and capture them. In a German prison camp, the two become friends when Phelps takes responsibility for an unflattering caricature he drew of a guard, rather than let O'Gaffney take the blame. The two escape, stealing the white robes of Arab prisoners to blend in with the snow. However, they encounter a group of similarly garbed Arab prisoners being sent by train to Constantinople. Near the end of their journey, Phelps creates a distraction, and the two men jump off, landing in a hay wagon. When the hay is loaded onto a ship bound for Arabia, so are they. The stowaways are discovered, but the skipper is satisfied when Phelps pays him their fare. When a small boat founders nearby, Phelps jumps in to try to rescue an Arabian woman, Mirza. Both he and the woman have to be saved by O'Gaffney. The two soldiers and the skipper vie for the veiled woman's affections. Phelps eventually coaxes her into removing her veil, and is entranced by her beauty. Meanwhile, the woman's escort observes this development with disapproval. The skipper insists on being paid for Mirza's fare, but none of the three have any money left. They hold him off as best they can. When they reach their destination, the skipper refuses to let Mirza debark without paying, so O'Gaffney robs the purser to get the money. Mirza is met by Shevket Ben Ali ; Mirza informs Phelps that her father has arranged for her to marry Shevket. They depart. The Americans jump overboard when the skipper discovers what happened to his purser. The two men head for the American consul, but leave hastily without speaking to him when they find the skipper already there lodging a complaint. They decide to seek the assistance of Mirza's father the Emir, who turns out to be the governor of the region. However, Mirza's escort has told him and Shevket that Phelps has seen her without her veil. Outraged, the Emir sends his men to bring the Americans back to be executed. Unaware of this, the two soldiers saunter into the Emir's palace. Phelps reads Mirza's warning note in time, and the two escape. When Phelps sets out to rescue Mirza, O'Gaffney shows true friendship and accompanies him. They are trapped by Shevket and his men, but when Mirza threatens to kill herself, Shevket proposes they settle this with a duel in which only one of the pistols is loaded. Phelps agrees and fires first; his gun is unloaded. Mirza is made to leave the room. Then Shevket reveals that both guns are empty; he did not wish to wager his life with a "dog". He exits, leaving his men to dispose of Phelps. The two men overcome their captors, relieve Shevket of Mirza, and ride away.
The film was long thought lost before being located in Howard Hughes' film collection after his death. Two Arabian Knights was preserved by the Academy Film Archive, in partnership with UNLV, in 2016.
