Every day at three o'clock, a glossy black colt named Gypsy arrives at the schoolhouse to greet his mistress, young Meg MacWade. One day, Meg's parents, Frank and Em, try in vain to find the courage to tell their daughter that Gypsy must be sold, as the long drought has left them with barely enough water to survive on their small farm. The following morning, stable owner Wade Y. Gerald buys Gypsy, then hands the animal over to his brash trainer, Hank, to turn him into a race horse. When Gypsy is not there to meet her after school, Meg runs home in fear and confronts her parents. Frank is too upset to speak, but Em sadly explains to Meg that they acted out of necessity. Wade shows Gypsy to his young son Phil, who is concerned that the horse is listless and off his feed. Gypsy is released into the corral, where he promptly jumps the fence and runs away to meet Meg at school. Shortly after Meg and Gypsy get home, Hank arrives to take the horse back, and when he uses the whip on Gypsy, Frank angrily knocks him down, then gently leads Gypsy into the carrier. Gypsy's training continues, and the horse shows impressive speed. One day, Gypsy again breaks free and runs away. Hank goes to the MacWade home, and Frank and Em say that Meg has not come home from school. Frank finds Meg and Gypsy hiding in a cave, and comforts his daughter. In the morning, Frank and Meg return Gypsy to the Gerald ranch, and Wade is surprised to learn that the horse has run away twice. After Meg bids Gypsy a tearful goodbye, she meets Phil, who promises to take care of the horse for her. Gypsy is taken to Greenway Park for the thoroughbred racing meet. When Hank's back is turned, Gypsy releases the latch on his stall and escapes, then begins the 500-mile trek back to the MacWade farm. Along the way, Gypsy is roped by some cowboys, but rears up and escapes when they try to brand him. The cowboys pursue him to the edge of a canyon, but Gypsy jumps into the lake below and swims to the other side. Later, Gypsy runs by a small roadside diner, and the waitress shows her customers a newspaper article about the runaway horse. When they learn there is a $1,000 reward for the animal, four young men pursue Gypsy on their motorcycles, but the spirited horse eludes them. Gypsy continues his journey over the parched land, but thirst and exhaustion finally overtake him. The unconscious Gypsy is discovered by a young boy, Pedro, who is riding by on a burro. The boy gives Gypsy water, and when that fails to revive the horse, he goes to get his father Tony. Gypsy is gone when they return, but Tony and Pedro follow his tracks and bring the horse back to their small farm. Despite Pedro's affection for him, Gypsy is restless. One day, Tony brings two men over to buy the horse, and Pedro is crushed. That night, while the men are drinking and playing music, Pedro--alarmed by the whip that one of the men is carrying--releases Gypsy. Back on the farm, Frank tells Em that they should give up and look for work up north until the drought ends. Just then, they hear whinnying and rush outside to find a bedraggled Gypsy looking in Meg's window. They are tending to the animal when Wade, Phil and Hank drive up. In desperation, Frank and Em claim that the horse is just an old nag they bought to keep Meg company. Realizing what Gypsy has done to return to the little girl he loves, Wade and Phil pretend not to recognize the horse. Hank protests, but Wade fires him for his callous treatment of the horses under his care. At three o'clock, Gypsy grows excited, and Frank releases him. The horse gallops through town to the schoolhouse, and as Meg happily embraces Gypsy, it begins to rain.
