Montero is the corrupt governor of California who fancied the wife of Diego de la Vega, the original Zorro. When he uncovers de la Vega's identity, he infiltrates his house and de la Vega's wife Esperanza is accidentally killed by one of Montero's soldiers, who is then himself killed by a furious Montero. He then arrests de la Vega and takes his infant daughter Elena and raises her as his own, but de la Vega swears vengeance on Montero.
Twenty years later, Montero returns to California with the intent on purchasing the territory for himself to rule, by any means necessary, including illegal activity. Meanwhile, an aged de la Vega escapes from prison upon knowing that his archenemy has arrived. Knowing Montero will resume his evil deeds, de la Vega realizes he needs an apprentice to finish what he started. Soon enough, finds an apprentice named Alejandro Murrieta, whom he trains to become the new Zorro. Together, the two Zorros confront Montero and his second-in-command, Captain Harrison Love, and Elena discovers that de la Vega is her true father. During the climax, Alejandro battles Love while de la Vega crosses swords with Montero, but he is mortally wounded by Montero during the fight. However, de la Vega manages to kill Montero by dragging him behind a wagon filled with gold bars and over a cliff, where the screaming Montero falls to his death. The wagon also lands on top of Love, who happens to be right below the cliff, crushing him.