Five-year-old Shirley Blake (Shirley Temple) and her widowed mother Mary (Lois Wilson), a maid, live in the home of her employers, the rich and mean-spirited Smythe family: Anita (Dorothy Christy), J. Wellington (Theodore von Eltz), their spoiled seven-year-old daughter Joy (Jane Withers), and cantankerous wheelchair-using Uncle Ned (Charles Sellon). After Christmas morning, Shirley hitches a ride to the airport to visit her late father's pilot friends. The aviators bring her aboard an airplane and taxi her around the runways while she serenades them with a rendition of "On the Good Ship Lollipop". That day, Mary is killed in a traffic accident. Loop (James Dunn), one of the pilots and Shirley's godfather, takes Shirley up in an airplane, explaining they're in Heaven where her mother now rests. When the Smythes learn of Mary's death, they plan to send Shirley to an orphanage. However, Uncle Ned, who has grown fond of "Bright Eyes", insists that Shirley stay with them. To raise money for attorney fees, Loop reluctantly accepts a lucrative contract to deliver an item by plane, cross-country to New York during a dangerous storm. Unbeknown to him, little Shirley sneaked away from the Smythes' home, found his airplane at the airport, and stowed away inside. When their plane loses control in the storm in the wilderness, they parachute to the ground together and are eventually rescued. The impasse over custody is resolved when Loop, his former fiancée Adele (Judith Allen), Uncle Ned, and Shirley all decide to live together. The Smythes leave the courthouse miserably, except Joy, at first; when she rudely comments that at least they don't have to be nice to Uncle Ned anymore, her mother slaps her hard across the face.