An American Tail: The Treasure of Manhattan Island, titled in the film as An American Tail III: The Treasure of Manhattan Island was the first direct-to-video and third film in the An American Tail series. This film was first released by Universal Studios Home Entertainment in the United States in 1998. Thomas Dekker took over the role of Fievel Mousekewitz from Phillip Glasser, the original actor, who was already 20 years old by then. Four actors from the original film (Dom DeLuise, Erica Yohn, Nehemiah Persoff, and Pat Musick) reprised their roles.
The story starts off in New York City setting sometime after the first movie, presumably between 1892 and 1896, Fievel and Tony discover that an ancient treasure lies underneath Manhattan when snooping around an abandoned subway (the Beach Pneumatic Transit system) and stumbling upon the remains of a dead mouse clutching a treasure map, deciding they must find it with the help of an archaeologist Tony knows: Dr. Dithering, along with fighting five villains as well.
The movie focuses on the relationship between the over-exploited workers of a sweatshop (in this case, a cheese production line) and the factory's rich owners: Mr. Grasping (Ron Perlman), Toplofty (Tony Jay) and O'Bloat (Richard Karron). It also focuses on the plight of the Native Americans in the United States. The treasure under Manhattan turns out to be a group of Lenape mice living a long distance beneath the surface (far below the sewers, riding in an underground pressurized train) that decided to hide when they saw how the first Europeans only brought war and disease with them and didn't want to wait for the European mice to do the same to them. An emotional scene ensues when Fievel must struggle with how cruel his own people the Europeans were (and still are at the time the film takes place) to the natives of America.
The sachem decides to send his cute and beautiful daughter, Cholena, to the surface to see if they have "changed their ways." Upon their return, Scuttlebutt (John Kassir) (one of the members of the expedition to find the treasure) reports to the villains unbeknownst to the rest of the members of the expedition, who then decide to use this to their advantage. They tell all the workers of the sweatshop about Cholena (obviously not by name) and that she is their enemy. The mouse NYPD Chief McBrusque (Sherman Howard) and Scuttlebutt engage in a bout of police brutality, burning down "every mouse house and rat hole" until they find her. After the angry mouse mob try to capture Cholena and anyone else involved with her, Fievel and his friends decide to take Cholena back underground, but the police find out and go after them. Meanwhile, everyone finds out about Dr. Dithering's friendship with the Indian and take him to the butcher shop for his punishment. Papa tells everyone about how madness like this is why they all left for America and should work together to become friends with those different from them as the fellow Americans they are. Tiger saves Dr. Dithering from the villains, who escape and order McBrusque and his men to find and murder the Native Americans. Upon returning Cholena to her home and telling the chief what is happening. McBrusque, Scuttlebutt, and the other police officers show up to the village until the Chief, the Native Americans, Fievel and his friends drive the villains away. The chief gives them a gunpowder bomb to collapse the tunnel connecting the Native Americans to the outside world. But before they can do so, they are ambushed by the enraged McBrusque and Scuttlebutt who attempt to kill the kids once and for all, but the two crooks are overpowered and Fievel manages to set of the bomb. This floods the tunnel, together with McBrusque and Scuttlebutt as they fall into the chasm to their deaths. Tony and Tanya managed to reach higher ground, but Fievel was carried off by the current. When the water recedes Tanya and Tony desperately search through the mud to find him, before giving up. But just then, Fievel breaks through the surface, and they all three share a muddy group hug, thankful that everyone survived.
The movie ends with Fievel's papa forming a worker's union and the villains agreeing amongst themselves to negotiate "with that riff-raff" because otherwise, they'll go on strike and make them go bankrupt while Tiger the cat, who is now the new police chief, watches them. The last scene is Fievel seeing, through a foldable telescope, Cholena and her father disappearing into a hidden door at the foot of a statue, which pleases Fievel.
- Thomas Alexander Dekker as Fievel Mousekewitz
- Lacey Chabert as Tanya Mousekewitz
- Nehemiah Persoff as Papa Mousekewitz
- Erica Yohn as Mama Mousekewitz
- Dom DeLuise as Tiger
- Pat Musick as Tony Toponi
- Elaine Bilstad as Cholena
- David Carradine as Chief Wulisso
- René Auberjonois as Dr. Dithering
- John Kassir as Scuttlebutt
- Sherman Howard as Police Chief McBrusque
- Ron Perlman as Mr. Grasping
- Tony Jay as Toplofty
- Richard Karron as O'Bloat
- Marianne Muellerleile as Lucretia-Noble Rat
- Dave Mallow as Looper
- Besides respecting the history of the Mousekewitz family, the concept is hated by the majority of the audience. The changing of fan favorite Tanya to Cholena, plus Tanya's personality change make this sequel one of the most unpopular Don Bluth films, thus making Cholena one of the most unpopular Don Bluth characters, making it one of the few Don Bluth sequels to be explicitly dismissed from canon.