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In Havana, Cuba, both Joe Martin, an American dancer, and wealthy socialite Diana Harrison, have a winning lottery ticket with the same number.  Joe's ticket, however, is counterfeit, and he misses out on the $5,000 prize.  After she sees him perform a dance, Diana tries to give Joe the money, as she has no real use for it, but he refuses out of a sense of pride.  She then offers to back him in his own nightclub, but when he tries to seduce her, she slaps him and leaves angrily.

Joe returns to his home town where the beautiful Carmelita takes him to the fiesta.  There Joe discovers the native dance, the rumba, and realizes its potential as a moneymaker.  Joe's manager, Flash, a former reporter, convinces a Texan to back a new nightclub run by Joe.

On opening night, Joe and Carmelita perform the rumba, and the club is a big success.  Diana, her boyfriend, Hobart Fletcher, and their friends attend the show, and later Diana dances with Joe.  They fall in love with each other and spend all their spare time together, while Joe teaches Diana the rumba.

One day, Diana receives a telegram from her parents ordering her to return to New York and become engaged to Hobart.  Finally ready to leave the safety of her wealthy lifestyle, Diana decides to stay with Joe forever and sends a telegram of refusal to her parents.  She sends a note to Joe asking to meet him late that night.  Believing Diana is going to break up with him because of their different social status, Joe arranges to have Carmelita meet him at almost the same time.

That night, Joe apologizes after he realizes that Diana intended to stay with him.  However, Carmelita comes in and tells Diana that Joe had been planning to make a fool of her for treating him lightly, and Diana furiously leaves him for good.  At her parents' home in New York, Diana finds out that Joe had left New York because he had evidence that would send a gang member to prison and was in fear for his life.  Diana defiantly breaks her engagement to Hobart.

When Joe reads about this, he signs up with a Broadway producer and returns to New York with Flash and Carmelita, but once there, Diana refuses to see him.  Joe ignores a warning to return to Cuba or be killed during his opening night performance.  During the opening night performance, Carmelita faints out of fear, and Diana rushes on stage, joining Joe in the rumba.  They are reunited, only to discover that the death threat was a publicity stunt planned by Flash.