A group of wealthy industrialists gather in the home of Mr. Lloyd, a millionaire who introduces them to Richard "Mack" McAllan, the engineer who successfully spearheaded the construction of the Channel Tunnel (the story takes place in the unspecified near future, though it is noted in the film that the Channel Tunnel is built "in 1940"). McAllan informs the group that the "Allanite steel" he developed, along with a "radium drill" developed by his friend Frederick "Robbie" Robbins, makes it possible to construct an undersea tunnel linking England with the United States. Though the group is initially sceptical, the backing of Lloyd and his associate Mostyn convinces the group to buy shares in the project.
Three years into construction of the tunnel, McAllan is a worldwide celebrity, but his work keeps him from his devoted wife Ruth and their young son Geoffrey. Called away to New York, he is informed that the people are losing faith in the project. Lloyd needs to have him use his fame to shore up support. Lloyd's attractive daughter Varlia, who is secretly in love with McAllan, keeps him company to further intensify the attention of the press.
The photos of the couple add to Ruth's sense of isolation, and she decides to work in the tunnel as a nurse. There she is affected by an unknown gas afflicting the workers and loses her eyesight. Worried that her husband no longer loves her and not wanting him to stay with her out of pity, Ruth leaves McAllan, taking their son with her. Heartbroken at her unexplained departure, McAllan throws himself into the project, alienating Robbins in the process.
Years pass. Though the cost of the tunnel in lives and money continues to mount, the British Prime Minister and American President eagerly anticipate its completion and the unity and peace they promise it will bring. Ruth lives in the countryside with her now-grown son, who lobbies Robbins to find him a job working in the tunnel. The tunnel itself is nearing completion, but the workers encounter a submarine volcano that will necessitate a detour. McAllan needs more money to establish a detour, but is opposed by Grellier, an arms manufacturer, and Mostyn. The two men had earlier manipulated the stock market to become the controlling shareholders in the company. Lloyd suspects that Grellier and Mostyn plan to use the delay to depress stock prices again, and this time gain total ownership of the tunnel, but Varlia convinces Mostyn to fund further construction by promising him the one thing he has always wanted, but never gotten—her hand in marriage. Though the project goes forward, Grellier has Mostyn killed for backing out of their deal.
Despite the renewed effort, samples indicate the volcano may be too large to drill around. The drill breaks through to volcanic gases that kill hundreds of workers, including Geoffrey. The project seems on the verge of collapse. Determined to see the project through and fortified by the reappearance of Ruth (who came to the tunnel site to discover Geoffrey's fate), McAllan vows to press on. With three volunteers, McAllan and Robbins man the radium drill and, despite near-fatal temperatures, break through to the American side of the tunnel.Richard Dix as Richard "Mack" McAllan
Leslie Banks as Frederick "Robbie" Robbins
Madge Evans as Ruth McAllan
Helen Vinson as Varlia Lloyd
C. Aubrey Smith as Lloyd
Basil Sydney as Mostyn
Henry Oscar as Grellier
Hilda Trevelyan as Mary
Walter Huston as President of the United States
Cyril Raymond as Harriman
George Arliss as Prime Minister of Great Britain
Jimmy Hanley as Geoffrey McAllan
Bernhard Kellermann's 1913 novel Der Tunnel had been filmed three times before, once as a German silent, Der Tunnel (1915), and then as two sound films Der Tunnel (German) and Le Tunnel (French), both released in 1933 and directed by Curtis Bernhardt, who went on to work in Hollywood. The Tunnel made extensive use of footage from the 1933 German version.
A first draft of the screenplay written by Sidney Gilliat was discarded. Clemence Dane, who provided additional dialogue, was the pseudonym of Winifred Ashton, an English novelist and playwright who would go on to win an Academy Award for Best Story for Perfect Strangers (1945).
The New York City opening of The Tunnel took place on 27 October 1935.
An original advertising poster for the film was catalogued with an estimated value of between $2000 – $3000 by Heritage Auction Galleries in Dallas in the summer of 2006.