Unbeknownst to them, an armaments manufacturer producing highly explosive bullets wants to ensure that the peace conference is a failure, and do everything they can to sabotage it: the general manager, Winkelreid (Louis Calhern), assisted by Wise Gai Chow-Chow (Hugh Herbert, playing a yellow peril Chinese character common to the era), hires a vamp, Dolores (Marjorie White), to distract Willy and Hercules and steal their secret documents.

Willy and Hercules, unaware of the intrigue surrounding them, persist in carrying out their mission, delayed by 8 months after the captain of their steamship gets drunk and steers wildly off course.

In Europe, Winkelreid is joined by four directors of the firm, Schmerzenpuppen, Puppenschmerzen, Schmerzenschmerzen and Puppenpuppen; they go to a dive bar, the Dead Rat, and hire a second femme fatale, Fifi (Phyllis Barry).

Diplomaniacs was the first Wheeler & Woolsey comedy under the supervision of studio head Merian C. Cooper, who resolved to cut costs during the troubled Depression era.

The team's recent comedies Hold 'Em Jail and Girl Crazy had cost $408,000 and $502,000, respectively, under previous studio head David O. Selznick; Cooper slashed the budget for Diplomaniacs to $242,000.