Luisa Ginglebusher, Margaret Sullavan, has grown up in the Municipal Orphanage, where she enchanted the other girls with her bedtime fairy tales. When she lands a job as an usherette in a Budapest movie palace, the kindly orphanage director Dr. Schultz, Beulah Bondi, sends the young woman into the world with simple, hopeful instructions: do a good deed every day, be friendly to everyone, and mind the male gender a little from behind the scenes.
After Luisa finishes her shift, a dashing man named Joe, Cesar Romero, tries to force himself on her. She resists, and in a moment of misdirection she notices Detlaff, Reginald Owen, a waiter she had met in the theatre on the sidewalk. To deflect Joe, she tells him that Detlaff is her husband, and the ruse works. Detlaff takes her out for sandwiches, and his world-weary charm slowly wins her trust as he offers a glimpse of a refined life beyond the orphanage’s walls. He even grants her a glimpse of a world where a party invitation and a dancing lesson feel like magic.
At the party, Luisa looks radiant in a dress borrowed from the theater; her complete innocence becomes the source of gentle laughter for the guests. Misunderstandings abound, especially when she assumes Konrad, Frank Morgan, a wealthy meat-packing magnate, is merely another waiter. Detlaff, ever cautious, keeps a protective eye on his ward and quietly foils Konrad’s advances. When Luisa finally understands Konrad’s true intentions—he swoops her up into the private dining room—she turns the tables with the same ploy that worked on Joe: she proclaims herself a married woman. To seal the ruse, she names a husband from a phone book, and she, delighted, announces to Detlaff that she has become someone’s good fairy.
Konrad, who wants more than a flirtation, travels to find the “husband” and encounters Dr. Max Sporum, Herbert Marshall, a principled but perhaps naïve lawyer. Konrad promises Sporum a five-year contract and a generous bonus to keep Luisa away from Detlaff. In reality, Konrad plans to use the husband as a convenient cover so he can pursue Luisa himself.
Luisa goes to see Sporum to tell the truth, but he misreads the situation in a charmingly innocent way and thinks she has come to deliver a gleaming new pencil sharpener he ordered. They begin to bond as they stroll through a day of shopping and laughter; Sporum eagerly buys a bright-colored car and even shaves his beard, encouraged by Luisa’s encouragement. He purchases a fur stole for her—the first real gift she has ever received. When she tells him she must meet a man at his hotel that night, Sporum misinterprets her intent and withdraws, leaving Luisa torn between honesty and the fragile hope of a future.
Detlaff, meanwhile, grows furious that Luisa intends to see Konrad again, but she remains determined to secure Sporum’s future as well. She phones Sporum, and the doctor, ever gracious, apologizes and begs her to think of him as if they shared real affection. Konrad’s jealousy surfaces—he rages at the sight of Luisa’s foxine fur, insisting the stole is a cheap cat—and sobriety finally returns him to the desire to marry her and have children. Detlaff bursts onto the scene, grabbing Luisa and threatening to expose everything to derail Sporum’s new, respectable life.
A chase follows, carrying Luisa, Konrad, and Detlaff into Sporum’s rooms. There, in tears and confusion, Luisa confesses as clearly as she can, wishing she could be a true fairy who could undo the whole tangle with a single wave of a wand. Sporum, touched by the earnest mess of it all, begins to recover and envisions a life of shared poverty with Luisa. Yet Konrad’s insistence on the contract finally unsettles that fragile dream, triggering a chaotic finale in which all three vie for the title of the season’s “good fairy.”
In the end, the story rests on a public, hopeful image: Luisa descends the aisle on Sporum’s arm, a bridal crown catching the light, while the orphans sing of fidelity and truth. The film closes on a note that blends whimsy with a quiet, practical love, suggesting that truth, generosity, and a dash of old-fashioned luck can unite two very different lives in a hopeful, if imperfect, future.
