Lucky Gagin Robert Montgomery arrives in San Pablo, a dusty town in New Mexico, during a lively fiesta. He intends to exact retribution for the death of his best friend Shorty by blackmailing mobster Frank Hugo [Fred Clark], a plan built on a check he has hidden in a locker and a key concealed behind a framed map in the bus depot waiting room. The festive crowd makes finding a room tricky, so he ends up in the non-tourist side of town where a local woman, Pila [Wanda Hendrix], guides him to the La Fonda Hotel and offers him a talisman she claims will protect him.
Gagin goes to Hugo's hotel room and knocks out Jonathan [Richard Gaines], Hugo's private secretary. Marjorie Lundeen [Andrea King], Hugo's sophisticated acquaintance, probes for details and learns Hugo will not be there that day. In the hotel lobby, FBI agent Bill Retz [Harold Goodwin] corners Gagin, urging him to drop the plan.
Still seeking a room, Gagin visits Cantina de las Tres Violetas, where Pila sits outside. Inside, he is the only non-Hispanic; after buying a drink with a twenty-dollar bill, the barkeep cannot make change, and Pancho [Thomas Gomez] steps in to offer to buy ten dollars' worth of drinks for everyone.
Gagin spends the night at Pancho's tiovivo; Pila arrives and ends up sleeping in a carousel seat. Retz warns that if he can readily locate Gagin, so will the mob.
The next morning, Gagin returns to La Fonda and meets Frank Hugo [Fred Clark], who wears a hearing aid. Gagin tells Hugo about the incriminating check. They arrange a meeting that evening at the Tip Top Cafe, where Hugo will pay thirty thousand dollars for the check. Retz formally asks for the evidence, which Gagin refuses to hand over.
Gagin has lunch with Pila, but their meal is interrupted by the arrival of Marjorie Lundeen [Andrea King], who suggests a scheme to shake Hugo down for more money; Gagin declines to go along.
After lunch, Gagin retrieves the check from the bus depot and follows the fiesta crowd to the Tip Top Cafe. He meets Hugo, who explains the bank messenger with the money will be late.
Marjorie invites Gagin to dance; outside in a dark alley, she reveals there is no messenger. Two toughs pounce on Gagin, stabbing him in the shoulder. Retz finds the scene—one thug dead, another with a broken arm—and confronts Hugo at the dining table. Pila discovers Gagin in the bushes, pulls the knife from his back, and they make their way back to Pancho and the merry-go-round.
Two more thugs arrive at the tiovivo. Gagin hides among the carousel riders as Pancho endures a brutal beating that does not break his loyalty. Wounded, Gagin agrees to go with Pila back to her village, San Melo, handing the check to her for safekeeping. Locke [Edward Earle] and Marjorie Lundeen catch up; when Locke approaches, Pila smashes him with a bottle and they escape, leaving Marjorie to deal with the fallen rival.
Gagin returns to the La Fonda; Pila finds him outside Hugo's room. Hugo's henchmen escort them inside, where Hugo, Marjorie, and Jonathan press Gagin for the location of the check. Supported by a battered memory, Gagin is beaten; Retz arrives, disarms the assailants, breaks Hugo's hearing aid, and recovers the check from Gagin.
The next morning, Retz urges Gagin to bid farewell to Pila and Pancho and return to the carousel. Gagin says adios to Pancho, then awkwardly to Pila, returning the charm to her. As Retz and Gagin depart, Pila recounts her adventure and savors being the center of attention among her circle.
