At a party, guests await the arrival of Laura Pennington Dorothy McGuire and Oliver Bradford Robert Young. The blind pianist Major John Hillgrove Herbert Marshall sits at the piano and performs his tone poem, The Enchanted Cottage, a piece he wrote in their honor.
Laura travels to a seaside New England cottage, where she meets Hillgrove and his young nephew Danny Alec Englander. Laura has heard magical stories about the cottage from her mother before her death, and, feeling ostracized for her plain looks, she is hired as a caretaker by Mrs. Abigail Minnett Mildred Natwick, a widowed tenant owner who lost her husband in World War I. Minnett feels a kinship with Laura, recognizing a kindred spirit in someone who has endured hardship.
Oliver arrives with his fiancée Beatrice Alexander Hillary Brooke. Beatrice is not fond of the cottage’s decor, but Laura insists the place is magical and shows her the window where couples have written their names, a symbol of the bond they might share.
A honeymoon party is planned, but Oliver sends a letter saying he cannot arrive because he has been called back into military service. Beatrice cancels their leasing agreement. One year later, a telegram arrives stating Oliver’s intention to rent the cottage indefinitely. Oliver comes back, hiding his face inside his trench coat, and locks himself in his room.
That night, Laura enters his room, and Oliver reveals the disfigurement of his war injuries: a scarred face and a disabled right arm and hand after his plane was shot down in the Battle of Java. The next morning, Laura and Oliver share a moment in the garden, and Hillgrove explains that blindness had given him a new lease on life through music.
Oliver receives a letter from his mother, Mrs. Price Spring Byington, but he refuses to see her and his stepfather, wary of how he looks. Laura seeks him out by the seashore, and, to keep distance, Oliver proposes to Laura, who accepts.
After their honeymoon, Laura and Oliver return to the cottage transformed. A flashback reveals their initial, tentative moments before their wedding dinner: Laura tries to declare her love but cannot, and Oliver comforts her, realizing his genuine feelings. She, in turn, sees him as handsome and unscarred.
Back at the cottage, Mrs. Minnett attempts to warn them about their “transformation,” while Mrs. Price comments on Laura’s appearance and character, breaking the spell of their mutual illusion. Minnett offers her blessing, recalling how her late husband helped her feel beautiful, which becomes the true enchantment of the cottage. She then leaves, and Laura and Oliver hold hands, writing their names on the window as a final testament to how they now perceive each other.
They return to the front door, stepping into the world as their idealized selves, before sharing a kiss and entering together.
