When Barbara Barry, the daughter of a wealthy, widowed soap manufacturer, sneezes three times at dinner, her overly strict, spinsterish servant Collins sends her to bed and calls both the doctor and her father's office.  Her father is busy inspecting chorus girls for his new advertising exhibition, but when he is told that Barbara is ill, he rushes home to find that it was only Collins getting panicky.

Over Collins' objections, Barbara's kind, matronly servant Woodward convinces Barry to send the girl to a school in the Adirondacks where she could meet other children.  Collins takes Barbara to the train station, where a man steals her purse.  She leaves Barbara with a porter as she tries to find the thief, and on the street, Collins is hit by a car and then taken to a hospital as an unidentified person.  Not knowing what happened to Collins, Barbara eludes the porter and decides that rather than go to school, she will take a "vacation," which Collins told her meant seeing new faces and becoming another person oneself.

Barbara sees an organ grinder and asks if his name is "Tony," like the name of the organ grinder in the "Betsy Ware" stories, which Woodward has read to her.  When she learns that the man's middle name is, in fact, Antonio, Barbara follows him home.  After she identifies herself as Betsy Ware, an orphan, Tony and his wife invite her to spend the night.  As Barbara sleeps, a snooping man peers through her window.

The next day, in the same tenement, Jimmy Dolan, the optimistic half of the song-and-dance team of Dolan and Dolan, practices tap dancing in preparation for a radio audition.  When his cynical wife Jerry hears someone answer his taps in the room below, Jimmy finds Barbara, who is an excellent dancer.  After he learns that she is an orphan, Jimmy talks Jerry into putting Barbara in their act.  Barbara, who calls Jimmy "Pudd'nhead," another character from the Betsy Ware stories, agrees to pose as the Dolans' daughter, as the ominous man overhears their plans.  An enthused advertising agent auditions the Dolans' act and calls Margaret Allen, an advertising executive who works for Barry's rival, the stodgy Simon Peck.  Although at first, the irascible Peck refuses to consider them, Barbara wins him over, and the Dolans become a hit doing a nightly show.  Meanwhile, Barry romances Margaret, unaware of Barbara's fate.

On the night of the Dolans' second show, Margaret and Barry listen to the broadcast.  Barry recognizes Barbara's voice, and after he ascertains that she never arrived at the school, he calls the station to have them hold her until he gets there.  Thinking that Barry is trying to put something over on him, Peck orders the Dolans to take Barbara away.  After Barbara confesses to the Dolans that she is Barry's daughter, they become afraid that they will be arrested as kidnappers, so they leave Barbara alone in their apartment and anonymously call Barry to tell him where to find her.  The spying man then enters the apartment and tries to drag Barbara away, so that he could hold her for ransom, but the Dolans, now resigned to facing up to their fate, return, and Jimmy fights the man.  Barry arrives with the police, and the man is arrested, along with Jimmy and Jerry; however, Barbara explains what happened, and the Dolans are released.  When Peck arrives and argues about the contract, Margaret convinces him and Barry to merge the two companies.