Abused by a cruel orphanage matron, Annie, a spunky, redheaded orphan, decides to run away and find her parents. After eventually managing to escape the orphanage, she sadly is caught and sent back by Officer Ward of the NYPD. Soon though, her luck improves. Billionaire Oliver Warbucks decides to invite an orphan over to his house for Christmas and Annie is chosen.

The two quickly hit it off and he agrees to help Annie find her parents by putting up a $50,000 reward. Miss Hannigan's brother, Rooster, and his girlfriend, Lily, pretend to be Annie's parents by using information provided by Miss Hannigan. At the last minute, President Roosevelt intervenes to announce that the FBI has discovered that Annie's parents are in fact, dead. In the end, Hannigan, Rooster, and Lily are all arrested and Annie is adopted by Warbucks.