A scheming immigrant named Finian McLonergan, Fred Astaire arrives in America from his native Ireland, dragging a carpetbag that hides a crock of gold and bringing his daughter Sharon along to Rainbow Valley in the fictional state of Missitucky, where he hopes to bury the treasure near Fort Knox so its magic will multiply.
Hot on his heels is the leprechaun Og, Tommy Steele, desperate to recover his stolen crock before the magic wears off and he turns human. Among those drawn into the conflict are Woody Mahoney, Don Francks, a dreamy, impulsive man who woos Sharon; Susan the Silent, Barbara Hancock, Woody’s mute sister who speaks through expressive dance; Howard, Al Freeman Jr., an African-American botanist intent on developing a tobacco and mint hybrid; and Senator Billboard Rawkins, Keenan Wynn, a bigoted politician who sees Rainbow Valley as a target for profit and power.
Complications arise when Rawkins, convinced there is gold in Rainbow Valley, moves to seize the land from its residents, spewing racial slurs as he campaigns for control. Sharon, unknowingly standing on the exact spot where the crock is buried, makes a bold wish that Rawkins would turn black. In a swift turn of fate, Rawkins becomes Black; his dog—trained to attack Black people—gives chase, driving him into the woods. The leprechaun Og confronts the transformed Rawkins and explains that a witch’s magic altered his skin. To prove a change of heart, Og casts a spell to make Rawkins more open-minded.
The townspeople gather in the barn for the long-awaited wedding of Sharon and Woody, but the Sheriff, Dolph Sweet, his deputies, and the District Attorney, Wright King, interrupt the ceremony and arrest Sharon for witchcraft. Finian convinces them that Sharon can reverse Rawkins’s skin change overnight, and they imprison Sharon and Woody in the barn until daybreak. Meanwhile, Finian frantically tries to locate the crock, unaware that Susan has already discovered it and moved it to safety.
Og finally meets Susan on the bridge beneath which she has hidden the gold, and as he falls for her in Sharon’s absence, he wishes that she could talk. When Susan begins to speak, Og realizes that he must be standing above the crock for the magic to endure. With the clock ticking and the barn set to burn, Og wrestles with whether to use the final wish to restore Rawkins to whiteness—knowing the magic would vanish, the gold would disappear, and he would become mortal. After a passionate kiss from Susan, he chooses love and humanity, using the last wish to turn Rawkins white again. Sharon and Woody are released from the burning barn, and Howard’s mentholated tobacco experiments finally pay off, delivering financial relief to Rainbow Valley’s poor residents regardless of skin color.
In the aftermath, the town finds a fragile harmony as the magical gold’s power wanes, Sharon and Woody wed, and Finian—ever the wanderer—leaves Rainbow Valley in search of his own rainbow, hopeful that the valley’s new blend of opportunity and community will endure beyond magic.
