As a child, Princess Dala is given, by her father, the largest diamond in the world, in which if you stare into it can be seen a "Pink Panther" hence the name. However, now as a young woman, rebels in her home country have seized power and are demanding the return of the jewel. Dala relaxes on holiday in an exclusive skiing resort but noted British playboy, Sir Charles Lytton is in town. He is secretly "The Phantom" - infamous jewel thief who has eyes on the Pink Panther. Charles's playboy nephew George follows to the resort in an attempt to steal it and blame it on "The Phantom", not knowing that it's his uncle. On the Phantom's trail is Inspector Jacques Clouseau, from France, and his wife who, unknowingly to Jacques, is the lover of Charles and helper in the Phantom's crime. Jacques tries to stop the attempts but he is so clueless that when several attempts are made at a fantasy-dress party, Jacques looks everywhere but the right place...