Glimpy and Muggs McGinnis stumble into a late-night mystery on New York’s poor East Side when a man is stabbed and his attacker rifles through the body. In the ensuing confusion, a jeweled necklace is found by the pair outside their tenement, drawing the attention of both the culprit and the police. As the boys trail the evidence, the assailant spots them and gives chase, but the pursuit is cut short by sirens, and they hurry back to safety.
At home, the neighbors rally around a war refugee, Mrs. Darcy, who recognizes the found necklace as hers and suspects that the attacker was Compeau, an associate of Toscania’s Gestapo. She pleads with the boys to guard the heirloom until morning. Unknown to them, Saundra, Mrs. Darcy’s niece, is the true princess of Toscania, living in obscurity and under constant fear of discovery by the Gestapo.
Meanwhile, at a mansion, Compeau reports his bungled robbery to Mallet, Saundra’s ambitious cousin who has insinuated himself into Toscania’s government by posing as a protector of the princess. Mallet has persuaded Toscania’s recently arrived prime minister that he is loyal to the royal line, and he hires Compeau to assassinate Saundra so he can seize the throne, offering the stolen necklace—an emblematic crown jewel—as payment.
The next morning, the East Side Kids regroup to solve the case. They decide to have one diamond appraised at Kessel’s pawnshop while Saundra, penniless, tries to pawn an imitation of the necklace, unaware she’s being tailed. When the kids arrive, they stumble upon Kessel murdered and are arrested by Capt. Jacobs. At the station, Capt. Jacobs pressures Muggs to reveal the source of the diamond, but the gang refuses to name their informant.
As the plot thickens, Mallet learns that the necklace recovered by the boys is a fake, prompting a tense pursuit. Mallet visits Saundra’s new address and confronts her, but she remains safe with her aunt. A coded message left by Mrs. Darcy becomes the key to locating their hiding place, guiding Muggs toward the next move. In parallel, Compeau answers a newspaper item about the missing gem and tries to convince Capt. Jacobs that the jewel is his, only to learn that Muggs and the others still have it.
Released from custody, the gang tracks the thieves to their secret clubhouse. Compeau corners them at gunpoint, but Glimpy springs into action, disarming the intruder and reclaiming the necklace. Compeau escapes, but Skinny and Sam follow him to the mansion to report what they’ve learned to Muggs.
A misstep by Marty—Glimpy’s Merchant Marine cousin who loves Saundra—has unfortunate consequences: he confesses to police that he went to Kessel’s just before his death to buy an engagement ring, and is arrested on suspicion of murder. Mrs. Darcy then calls Muggs with the new address, but before the gang can reach the residence, Mallet makes his move again. Saundra invites him inside, not suspecting the danger, and the two are left in a perilous stalemate until the others crash the scene.
Saundra later reveals that the necklace they took from Compeau is a fake, and the young rascals vow to recover the real jewel. Meanwhile, Mrs. Darcy and Saundra clear their identities with Capt. Jacobs, and Marty is freed after the truth about the real royal at stake comes to light. The prime minister’s presence in the country confirms that Toscania’s throne is very much in play, and the boys stake out the mansion, hoping to prevent a kidnapping or assassination.
The boys stage a bold break-in, catching Compeau by surprise and turning the tables on Mallet as a brutal confrontation unfolds. The fight ends with the criminals exposed before the police and the prime minister, who acknowledge Saundra’s rightful status. In a lighter moment to close the caper, Marty asks Saundra to marry him, and the couple imagines a future reunion with Toscania as prince and princess, free at last to return home.
The case ties together street grit and royal intrigue with the East Side Kids’ trademark camaraderie, courage, and quick thinking, as they navigate danger, deception, and loyalty to protect a princess and her legacy.
