During the Nazis' effort to locate the Ark of the Covenant, Toht was sent to Nepal by the Third Reich Special Antiquities Collection to acquire the headpiece to the Staff of Ra from Marion Ravenwood. Toht and his subordinate Otto hired three henchmen off the streets of Kathmandu, Nepal known as Ratty Nepalese, Mean Mongolian, and Giant Sherpa and followed Indiana Jones to The Raven bar in Patan where they tried to take the piece.
All of the henchmen who went into the bar with Toht died during the ensuing fight with Jones and Ravenwood, during which Marion's bar was set ablaze. Toht noticed the headpiece lying on the ground during the skirmish, but when he tried to pick it up, he badly burned his hand as the headpiece had been lying too close to the fire. Screaming in pain, he ran outside and plunged his hand into the snow. He eventually fled with a serious burn scar on his palm. From this scar, the Nazis were able to create a crude, one-sided reproduction of the headpiece. However, the missing information from the other side would prove critical to finding the Ark's resting place, the Well of the Souls.
Toht later met up with Colonel Dietrich, Gobler, and René Belloq in Cairo, his "Heil Hitler" salute revealing his scarred hand. Frustrated with Belloq's inability to extract useful information from Ravenwood (who had been captured shortly after she arrived in Egypt with Jones), Dietrich had Toht intercede. His own interrogation proved equally fruitless, however. When the Nazis finally caught up with Jones at the Well of the Souls, Toht threw Ravenwood into the Well, for they had no further use for her. Toht walked away, giggling with glee as Jones and Ravenwood were sealed within the Well.
He later accompanied Belloq and his fellow Nazis in the effort to deliver the Ark to a safer location, since his duty was to oversee the delivery of the artifact Hitler desired. However, Jones succeeded in stealing the ark back from them. Toht and the others followed him and reclaimed the Ark, along with Marion, the next day, taking both to a small Aegean island north of Crete. Jones went after them in hopes of rescuing Marion, eventually revealing himself on their way to the Tabernacle. In the standoff that followed, Toht quietly sat on the sidelines as Belloq called Jones's bluff, forcing him to surrender.
That evening, Toht stood with Belloq and Dietrich in the Tabernacle for the ceremonial opening of the Ark. Initially, the Ark seemed to bear only sand, to Belloq's dismay and Dietrich's chagrin. Toht, on the other hand, was amused, as he had never quite believed in the supernatural aspects of his assignment. His laughter was replaced by astonishment as the Ark unleashed its true power, starting with the emergence of strange spirits. As the spirits swarmed around the assembly, Toht turned to see one of them approach; before his eyes, it transformed into a monstrous, skull-faced Angel of Death and howled at him and his cohorts. As the terrified Toht screamed at the sight of the Ark's true power, his face was melted off his skull by the heat of the Ark's flames, killing him. His collapsed remains were then swept up and incinerated by the following firestorm.
Arnold Ernst Toht is, arguably, more evil and dangerous than René Belloq, the film's main antagonist, due to his more sadistic nature and willingness to torture.
Toht's death is perhaps the most famous in the Indiana Jones films, alongside Walter Donovan's death in The Last Crusade. The "Melting Face" effect was achieved using a wax and gelatin model of Ronald Lacey's head, which was exposed to a heat lamp and then filmed melting at a high frame rate.
Despite his role, Toht has only sixteen lines of dialogue in the entire film (three of which are said in German). Most of his lines are spoken during the scenes in Nepal, and he has no dialogue in the film's final act.