The passengers and crew of a pleasure yacht owned by a wealthy man named Kasai head out and encounter a storm which drives them far off the usual nautical lanes till a radio broadcast declares their vessel lost at sea. Finding a small island, they quickly encounter problems finding food. As their supplies dwindle and fights break out, Kasai and then the others turn to eating the mushrooms that grow in abundance on the island. The discovery of the wreck of a research vessel, now overgrown with fungus, leads them to believe the island may have been the subject of radiological experiments, infecting the mushrooms. Whether the research vessel's crew caused the mushrooms to grow or were studying their already-rapid growth quickly becomes less of a concern than that of what happened to the crew.
The cohesion of the stranded falls apart rapidly; Kasai, famed writer Yoshida and singer Mami, already self-indulgent celebrities, are the first to eat the mushrooms, and begin to show signs of changing as fungal lesions appear on their faces and hands. Their actions end up killing the ship's first mate and drive the captain to suicide. University Professor Kenji attempts to flee with his lover and student Akiko, but their path is barred on several levels.
It becomes clear that menacing figures seen in the shadows or in brief encounters are all that remains of the once-Human crew of the research vessel, who are in the process of turning into giant mushrooms. Further, the same is now happening to those who ingested the mushrooms, also creating an addiction to eating more mushrooms and thus hastening the change. The always weak-willed Akiko succumbs to her new cravings, leaving Kenji to flee alone in the boat as it is carried back out to sea.
The film ends with Kenji narrating his horrific tale back in Tokyo, regretting that he left Akiko behind, and showing that in his hunger out at sea, he succumbed and ate the mushrooms, already showing the change in mind and body.
Many pieces of pop culture have used Matango as an inspiration, and in the NES video game Godzilla Monster Of Monsters, a giant Matango is a sub-boss that shoots out smaller Mushroom creatures.
The Mushroom People are depicted as a cross between zombies and hive mind creatures, though their direct menace seems greater when they are in transition to full mushroom, when their corrupted minds are still interested in converting others. Though eventually the people look entirely like giant mushrooms, it is unknown if they ever lose mobility and take root.
In an odd coincidence (that seems entirely a coincidence), this movie was filmed and released at the same time as CBS Television was developing Gilligan's Island under Producer Sherwood Schwartz, and the two situations have seen comparison. Unlike the characters on Gilligan, who despite their many flaws, cared for each other and worked together, the yacht crew and passengers were all dark takes on the same sorts of characters; the first mate is in this case reliable but unimaginative; the Skipper despairs of his navigation failures and ends his life; the wealthy man, the lady celebrity and the writer are in essence spoiled brats with no common sense; the young unworldly girl is easily pushed around and succumbs to the mushrooms quicker than some. For the supposed genius of the group, it is all he can do to survive, and not unscathed. Like in many a survival horror scenario, the group is doomed by a complete inability to work together.
Despite its inclusion by inference in the Godzilla NES game, it is unknown if this movie occurred in the same universe where Godzilla and other daikaiju dwelled, though an irradiated island producing monsters would be in keeping with the themes of that world.
The film (and thus those works that derived from it) are based on an even more seminal work, a 1907 short story called 'The Voice In The Night' by William Hope Hogsdon.