Young Elizabeth Blair (Shirley Temple) lives at the Lakeside Orphanage, a dreary, regimented place supervised by two decent but dour women. Her older sister Mary (Rochelle Hudson) works in the kitchen, laundry, and dormitory. Elizabeth is a sweet child but her high spirits and creative imagination often lead her into trouble with the superintendent; such as one night when she snuck in her pet horse Spunky into the children’s bedroom.
When the trustees descend on the orphanage for a tour of inspection, Elizabeth is caught playfully mimicking the head trustee and is threatened with being sent to a public institution. Young, rich, handsome trustee Edward Morgan (John Boles) intervenes. He takes an immediate liking to Elizabeth and, in a private interview with the child, learns that most of her life has been spent obsequiously expressing her gratitude for every mouthful that has fallen her way. He adopts her but, not wanting to curb Elizabeth’s spirit by making her feel slavishly obligated to him for every kindness, he tells her a fictitious “Hiram Jones” is her benefactor and he is simply acting on Jones’s behalf as his lawyer. He nicknames her “Curly Top.” Meanwhile, he has met and fallen in love with Elizabeth’s sister Mary but will not admit it.
Elizabeth and Mary leave the orphanage and take up residence in Morgan’s luxurious Southampton beach house. His kindly aunt, Genevieve Graham (Esther Dale), and his very proper butler Reynolds (Arthur Treacher) are charmed by the two. Elizabeth has everything a child could want including a pony cart and silk pajamas.
Mary secretly loves Morgan but, believing he has no romantic interest in her, she accepts an offer of marriage from young Navy pilot Jimmie Rogers (Maurice Murphy). Morgan is taken aback but offers his congratulations. Hours later, Mary ends the engagement when she realizes she doesn’t truly love Jimmie. Morgan then declares his love, reveals he is the fictitious “Hiram Jones”, and plans marriage and a long honeymoon in Europe with Mary.