On Christmas evening in the year 1909, in a quaint Midwestern town (visually inspired by Disney’s hometown Marceline, Missouri), Jim Dear gives his wife Darling a cocker spaniel puppy they named Lady. Lady enjoys a joyful life with the couple and befriends two local neighborhood dogs, a Scottish terrier named Jock, and a bloodhound named Trusty. Meanwhile, across town, a stray mutt named Tramp lives on his own, dining on scraps from Tony’s Italian restaurant and protecting his fellow strays Peg (a Pekingese) and Bull (a bulldog) from the local dogcatcher. One day, Lady is upset after her owners begin treating her rather coldly. Jock and Trusty visit her and determine that their change in behavior is due to Darling expecting a baby. While Jock and Trusty try to explain what a baby is, Tramp interrupts the conversation and offers his own thoughts on the matter, making Jock and Trusty take an immediate dislike to the stray and order him out of the yard. As Tramp leaves, he reminds Lady that “when a baby moves in, a dog moves out.”
Eventually, the baby arrives and the couple introduces Lady to the infant, of whom Lady becomes very fond and protective. When Jim Dear and Darling leave for a vacation, they put their dog-hating Aunt Sarah in charge of the baby and the house. Aunt Sarah’s two trouble-making Siamese cats, Si and Am, deliberately mess up the house, knowing Lady will get in trouble for it, and then get her in even more trouble by tricking Aunt Sarah into thinking that Lady attacked them. Aunt Sarah then takes Lady to a pet shop to get a muzzle. Terrified, Lady flees the pet shop but is pursued by a trio of stray dogs. Tramp manages to rescue her, fighting off the vicious strays. Seeing the muzzle on Lady’s head, Tramp decides to take her to the local zoo, where they find a beaver who is able to remove the muzzle with his teeth. Later, Tramp shows Lady how he lives “footloose and collar-free”, eventually leading into a candlelit dinner at Tony’s. Lady begins to fall in love with Tramp, but she chooses to return home in order to watch over the baby. Tramp offers to escort Lady back home, but when Tramp decides to chase hens around a farmyard for fun, Lady is captured by the dog catcher and brought to the local dog pound. While at the pound, the other dogs reveal to Lady that Tramp has had multiple girlfriends in the past, and they feel it is unlikely that he will ever settle down. Lady is eventually claimed by Aunt Sarah, who chains her in the backyard as punishment for running away.
Jock and Trusty visit to comfort Lady, but when Tramp arrives to apologize, Lady berates him for having other girlfriends in the past and his failure to rescue her from the pound. Tramp sadly leaves, but immediately thereafter a rat sneaks into the house. Lady sees the rat and barks frantically at it, but Aunt Sarah tells her to be quiet. Tramp hears her barking and rushes back, entering the house and cornering the rat in the nursery. Lady breaks free and rushes to the nursery, where Tramp inadvertently knocks over the baby’s crib before ultimately killing the rat. The commotion alerts Aunt Sarah, who thinks they harmed the baby. She pushes Tramp in a closet and locks Lady in the basement, then calls the pound to take Tramp away. Jim Dear and Darling return home as the dog catcher departs, and when they release Lady, she leads them to the dead rat. Overhearing everything, Jock and Trusty chase after the dog catcher’s wagon. The dogs are able to track down the wagon and scare the horses, causing the wagon to crash. Jim Dear arrives in a taxi with Lady, who reunites with Tramp, but Trusty is almost killed by the wagon.
That Christmas, Tramp has been adopted into the family, and he and Lady have started their own family, with Lady having given birth to a litter of four puppies (three daughters who look identical to Lady and one son who looks identical to Tramp). Jock comes to see the family along with Trusty, who is recovered and merely suffered a broken leg, and are formally welcomed as guests by the humans. Thanks to the puppies, Trusty has a fresh audience for his old stories, but he has forgotten them.