The film follows the adventures of Baron Munchausen, who is prompted to travel to the moon by his cousin Sirius, an astrologer convinced that it is inhabited by an ancient race called the Selenites. The Selentites incidentally possess the secret of immortality. The Baron takes up his cousin's offer and travels to the moon using a tall masted ship pulled by three hot air balloons and he is aided by his super-ability friends (who are from the prequel to this film, The Fabulous Adventures of the Legendary Baron Munchausen). When they reach the moon, they are initially placed in jeopardy as their craft lands in a crater and they fall into a subterranean sea inhabited by monsters...

The evil knight Torchesac, who is at the service of the sinister lord of La Mortaille, gets a very powerful magic flute and uses it for evil purposes. Johan and Pirlouit, assisted by the magician Homnibus, travel to the land of the Smurfs, the only manufacturers of this sort of instrument, to get a new one and battle the usurpers.