Set against the backdrop of New York City in the early 1930s, during a time of high unemployment and the challenges of Prohibition amidst the Great Depression, the story follows Annie, a spirited 10-year-old girl living in the bleak Hudson St Orphanage, overseen by the cruel and heavily intoxicated Miss Hannigan. The girls at the orphanage endure a difficult life under Miss Hannigan’s tyrannical rule as she despises her job.
In a bold move, Annie decides to escape her grim reality by concealing herself in a laundry cart, which is picked up by Mr. Bundles, the laundry man. During her brief adventure outside, she rescues a scruffy dog whom she names Sandy from a gang of unruly street kids. However, her freedom is short-lived as a policeman finds her and returns her to the orphanage, where she is sadly locked away in a cupboard with Sandy when Miss Hannigan discovers him hidden among the bed linens.
The atmosphere shifts dramatically when a luxurious car arrives at the orphanage, catching everyone's attention. The driver, a well-dressed and charming woman named Grace Farrell, introduces herself as the private secretary to the wealthy munitions mogul Oliver Warbucks. Grace's mission is to select an orphan for a week-long stay at Warbucks' mansion. Cunningly, Annie manages to charm Grace into choosing her for this special opportunity.
Once at the grand mansion, Annie impresses the household staff but finds that Mr. Warbucks is initially a tougher challenge to win over. Meanwhile, back at the orphanage, Miss Hannigan's brother Rooster and his girlfriend Lily arrive seeking financial help. When denied, Rooster callously takes money from her.
As days go by, Warbucks starts developing a bond with Annie. On the evening prior to her return to the orphanage, he takes her to Radio City Music Hall. The next morning, inspired by Grace’s suggestion, Warbucks considers adopting Annie. Despite his initial hesitation, he ultimately agrees after noticing how much Grace desires to keep Annie. Miss Hannigan, eager to get closer to Warbucks, tries to charm him as he requests her signature for the adoption papers.
At the mansion, Warbucks presents Annie with a lovely new locket, but Annie hesitantly tells him about her belief that her parents will come for her, clutching the other half of the locket she possesses. Warbucks vows to assist her in finding them. He appears on the radio, offering a substantial reward, drawing a massive crowd to their home. Among them are those claiming to be Annie's parents, who turn out to be the deceitful Rooster and Lily.
Miss Hannigan, realizing the con, confines the other orphans when they attempt to warn Annie of the peril. As Annie's “parents” lead her away, Miss Hannigan steps into the car, revealing the whole charade to Annie. However, the orphans manage to escape and race to the mansion to thwart Annie's kidnapping.
In a tense turn, Annie pretends to need a bathroom break, seizing the opportunity to tear up a check intended for her ransom. This infuriates Rooster, who threatens her life. A high-speed chase ensues, culminating in a dramatic showdown on a grand bridge where Annie, cornered by Rooster, is saved by Punjab, who swoops in from a helicopter, sending Rooster tumbling down.
With the danger past, Warbucks and Grace joyfully reunite with Annie, declaring that Warbucks will officially adopt her. The following day, a grand celebration is held complete with all the orphaned girls, suggesting they too have been placed with loving families, while Miss Hannigan is portrayed as a changed woman, signaling a hopeful fresh start.
