Bowery to Bagdad

During the reign of Hamud, the Caliph of Bagdad, after the magic lamp once belonging to Aladdin is stolen, Hamud orders his men to return it to him at any cost. The lamp is not recovered during Hamud's lifetime, but because his orders are sacred, future generations of his retainers continue the search until finally, in the 1950s, Selim and Abdul travel to the Bowery in New York City.

Meanwhile, bumbling Horace DeBussy "Sach" Jones buys the lamp at a junk shop and intends to give it to his pal, Louie Dumbrowski, the owner of the sweet shop in which Sach works. When Sach shows his treasure to his "chief," Terence Aloysius "Slip" Mahoney, and two other pals, Chuck and Butch, Slip ridicules him for wasting his money. While they are squabbling, Tiny and Canarsie, henchmen of racketeer Duke Dolan, arrive to pressure Louie to surrender his lease to the shop, but Louie adamantly refuses. In the shop's back room, Sach grumbles about his lack of courage and Slip's constant nagging, then, when he polishes the lamp, is amazed by the sudden appearance of the wish-granting genie of the lamp. The genie is equally amazed by Sach's stupidity, but nonetheless grants his wish for six malteds. While Sach enjoys his treats, the entire affair is witnessed by Tiny, who rushes to Duke's penthouse to tell him about the magical occurrence. Duke's third hood, Gus, has recently read about the lamp and convinces Duke that it is worth pursuing, so Duke sends Tiny and Canarsie to steal it.

Meanwhile, Sach tells Slip about his discovery, but Slip does not believe him until Sach makes the genie appear again. The conniving Slip persuades Sach to share the lamp with him, then instructs the genie that he can only take orders from the two of them jointly. The boys request $1,000,000, but are surprised when the genie loads the table with gold bars rather than "folding money." During the boys's ensuing quarrel, Sach inadvertantly wishes the gold away and both the money and the genie disappear. The incident is witnessed by Abdul and Selim, who follow Tiny and Canarsie after they steal the lamp.

At the penthouse, Duke's girl friend Velma urges him to rub the lamp, but when the genie appears, the gangsters are angered to learn that he cannot take their orders. Believing Sach to be the genie's master, Duke sends Velma to the sweet shop, where she flirts outrageously with the dumbfounded Sach, and lures him and Slip to the penthouse. Gus's girl friend Claire pretends to be Velma's cousin and attempts to romance Slip while Velma separates him from Sach. Velma takes Sach to Duke, who threatens him with physical violence if he does not persuade the genie to obey them. The genie finally explains that he can only take orders from Slip and Sach together, so while Velma holds Sach at gun point, the gangsters search for Slip, who has escaped from Claire and Gus.

Selim and Abdul have also arrived at the huge penthouse, adding to the melée. The Arabs capture Slip and lock him in the pantry, while the genie urges Sach to escape from Velma by aggressively romancing her. Louie, Chuck and Butch, who were told by Slip to come if he had not returned by 10:00, enter the fray, and after Slip is snatched from the pantry by Gus and Canarsie, Louie winds up in the pantry getting drunk with the genie. Duke, who keeps getting accidentally hit on the head by his men, becomes disgusted, and when Slip and Sach wander out onto the window ledge, orders his men to shoot them. Fortunately for the boys, Sach has found the lamp, and together they ask the genie to take them home.

They are momentarily baffled upon realizing that they have been transported to ancient Bagdad, the genie's home, but when a group of lovely harem girls come to pamper them, they decide to linger for a while. Their enjoyment is interrupted by the arrival of the caliph, who orders the genie to return to him and threatens to chop the boys into pieces when the genie states that he cannot. Slip reluctantly offers to exchange the genie for their freedom, and after the caliph agrees, the genie sends the boys back to the New York window ledge, where they are still under fire from the gangsters. Just then, Chuck and Butch arrive with the police, and Duke and his hoods are arrested. Later, at the shop, Slip and the boys are bemoaning their fate when the genie, who has become fond of them, pops up to grant them one last wish. Although Slip urges caution so that they do not waste their wish, Sach, fed up with Slip's insults, inadvertantly wishes that he had the nerve to punch Slip. His wish granted, Sach knocks Slip unconscious, but then quickly runs out the door before Slip can awaken and take revenge.