Worn by the Scorpion King Mathayus in the year 3067 B.C, the Bracelet of Anubis had been a part of the Scorpion King's garb as he attempted to invade the city of Thebes. The Scorpion King had lost the battle after seven years of attempts, and he, along with his remaining army, were cast out into the desert of Ahm Shere. One by one, the warriors died of heatstroke, thirst, hunger and exhaustion until the Scorpion King himself remained, pledging to Anubis as he looked to the skies above that if his life was spared, he would return payment with his soul, along with a pyramid of gold, the thing that he claimed to have been denied by the gods. After his prayer had been made, the Scorpion King looked down and saw a large black scorpion and, knowing it to be a token from Anubis himself, ate the arthropod up, chewing it as the stinger hit his hand. With that, a massive oasis sprang from the desert sands, allowing the Scorpion King to drink from the waters and eventually recuperate.
After his health had been restored, the Scorpion King had been given an army by Anubis that had allowed him to re-challenge the city of Thebes, destroying much of it and taking many lives in the process. Once the battle was won, however, the Scorpion King's life had been taken by Anubis as he dissipated into smoke, leaving behind his golden Bracelet; with their leader dying, the Army of Anubis shared the same fate.
Many centuries later, in 1290 B.C, the pharaoh Seti I had given his daughter, the princess Nefertiri, the task of ensuring that the Bracelet was kept safe as it was placed within a temple that had been designed by the High Priest of Osiris, Imhotep.
The Bracelet had remained within the temple until 1933 A.D, when it had been found by the explorer Rick O'Connell and his wife, the famed Egyptologist Evelyn O'Connell. The Bracelet had been placed inside of a metallic chest that had once been protected by two guards in the past, but as centuries had passed, the two men became mummies, standing in place as they had centuries ago. The chest containing the Bracelet was taken from its resting place, but at that moment, a rushing sound rang out: the O'Connells then knew that the Bracelet was under protection, for the inscriptions around the chest said that whoever opened the chest would "drink from the Nile". With that, a large torrent of water came down the corridors, taking Rick and Evelyn with it, almost drowning them as they took the chest with them. Outside of the chamber containing the Bracelet, Alex O'Connell, Rick and Evelyn's son, had mistakenly caused the crash of the supporting pillars within the main atrium, breaking through the walls and stopping the waters from drowning his parents.
The Bracelet was taken back to London for further study, but the chest containing the Bracelet unlocked itself once it reached the O'Connell's manor. Alex himself opened the chest and took the Bracelet out, putting it on his wrist. Once he had, Alex began to see visions of a journey to far-off destinations: ending with Karnak. Alex tried to remove the Bracelet but could not, instead pulling up his sleeve to hide it from his mother, who had just come into the room. Alex, to pretend that he hadn't opened the chest containing the Bracelet, took the key from its lock and put a statue of a baseball player inside. Evelyn then asked Alex to give the key to the chest, but Alex said that he couldn't find it, hiding the key from his mother. At that moment, a tall warrior named Lock-Nah had come into the room, demanding the chest. Evelyn drew out a sword and told him to leave, but Lock-Nah revealed that he had not come alone, as several other warriors stepped out from behind him. As Lock-Nah stepped forward with his minions, the Medjai warrior Ardeth Bay stepped out from a corner of the room, recognizing Lock-Nah: with that, a fight ensued as the stangers all drew out their swords and began to duel Evelyn and Ardeth.
Alex is captured by these warriors who are foot soldiers of an Egyptian cult who have resurrected Imhotep; they wish to use Imhotep's power to defeat the Scorpion King, which would give him command of the Army of Anubis. The cult, led by Baltus Hafez, the curator of the British Museum, includes the warrior Lock-Nah and the mysterious rich woman named Meela Nais, the reincarnation of Imhotep's love Anck-su-namun. The O'Connells set out to rescue Alex, accompanied by Evelyn's brother Jonathan and the Medjai Ardeth Bay. Rick's associate from his past adventures, Izzy, a pilot, provides the group transportation.
The bracelet of Anubis gives Alex visions, directions to Ahm Shere that the cult follows. At each location, Alex leaves clues for his parents, who follow in Izzy's dirigible. Imhotep uses the Book of the Dead to give Meela Nais the soul of Anck-su-namun but by doing so he also allows Evelyn to unlock the memories of her previous life as Princess Nefertiri, keeper of the Bracelet of Anubis and the daughter of Pharaoh Seti I. Lock-Nah discovers that Alex has been leaving clues, so Imhotep makes a wall of water that attacks the dirigible. The O'Connells crash in Ahm Shere. Izzy stays with the dirigible in hopes of repairing it. The O'Connells attack the cult, and both groups are attacked by pygmy mummies. Rick retrieves Alex while Ardeth Bay kills Lock-Nah. They escape from the pygmies, which kill most of the cult except for Baltus. Imhotep and Anck-su-namun are unharmed due to Imhotep's powers and Anck-su-namun being the keeper of the Book of the Dead.
Rick and Alex run to the pyramid, barely making it before sunrise. The bracelet detaches from Alex's arm. Ardeth regroups with the Medjai in case the army of Anubis rises. Anck-su-namun stabs Evelyn and kills her. Rick, grieving, pursues Imhotep. Baltus puts on the bracelet and revives the army of Anubis. After the Bracelet of Anubis have inserted into the enchanted scorpion statue, the statue then eat away Balthus's left hand. As Imhotep walks into the pyramid, Anubis takes his powers, wanting Imhotep to fight as a mortal. Rick finds Imhotep summoning the Scorpion King and they fight. The Medjai engage the army of Anubis. The Scorpion King interrupts Rick and Imhotep's fight. Imhotep tells the Scorpion King that he is the Scorpion King's slave, but Rick was sent to kill him. During Rick and the Scorpion King's fight, the Scorpion King kills Baltus. Jonathan and Alex collaborate to steal the Book of the Dead from Anck-su-namun. Alex uses the book to resurrect Evelyn, who duels with Anck-su-namun.
Alex and Jonathan go to help Rick. It is revealed that the scepter that Jonathan has been carrying extends into a spear that can kill the Scorpion King. The Medjai seemingly defeat Anubis' army despite heavy casualties, but see that they have only defeated the vanguard, and the full army is charging towards them. However, before the Anubis warriors hit the Medjai lines, Rick succeeds in killing the Scorpion King, sending him and his army back to the Underworld. The Scorpion King's death causes Anubis to turn the oasis back into a desert, and the oasis is being sucked into the pyramid. Rick and Imhotep are hanging from the edge of a pit that leads into the underworld. Evelyn risks her life to save Rick, but Anck-su-namun refuses to save Imhotep, who is heart-broken about this, and he lets go into the underworld to his death. Anck-su-namun, running away from the pyramid, falls into a scarab-filled pit, where she is bitten and suffocated to death.
The O'Connells reach the top of the pyramid, which is being sucked into the desert. Izzy arrives with a modified dirigible and saves the O'Connells. Jonathan grabs the diamond at the top of the pyramid before it sunks completely. Ardeth Bay salutes them as they fly over him.
The Bracelet of Anubis is no more as it is gone along with the Oasis of Ahm Shere.