In the final flying test for Sky Patrol graduation, instructor Tailspin Tommy Thompson (John Trent) flies with the son of flight commander Colonel Meade (Boyd Irwin). Carter Meade (Jackie Coogan) freezes during target practice but Tommy covers for him and he graduates.
When Bainbridge (Bryant Washburn), a weapons smuggler, is aware that the Sky Patrol will disrupt his smuggling operations. Carter sees an unidentified amphibious aircraft but is unable to fire on it and is shot down by Bainbridge, who takes him prisoner.
Carter is presumed dead but Tommy and Skeeter Milligan (Milburn Stone) locate a warehouse where the amphibious aircraft is hidden. Tracking the unknown aircraft to a ship rendezvous, Tommy and Skeeter try to get on board but are captured and locked up with Carter.
Monitoring the Sky Patrol radio, the smugglers learn the colonel and the Sky Patrol are heading for the ship. Tommy manages to set up explosives in the hold, and when the three prisoners are about to jump ship, Carter shoots a smuggler, ensuring their escape. The Colonel soon overpowers the rest of Bainbridge's men.
Tommy and Skeeter return to their commercial airline jobs, leaving Carter now in charge of the Sky Patrol.
Aviation film historian Stephen Pendo in Aviation in the Cinema (1985) saw Sky Patrol delving into familiar territory of "flying police". Earlier, Criminals of the Air (1937). Death in the Sky (also known as Pilot X) (1937), Reported Missing (1937), Mysterious Pilot (film serial) (1937 and Secret Service of the Air (1939) all dealt with similar scenarios of air police fighting criminals both on the ground and in the air.[8]