Upon the conclusion of World War II, old friends Slicker Smith and Herbie Brown head home from Europe aboard a troop ship. When Captain Christie orders an inspection of the soldiers' belongings, Herbie nearly blows up the ship with a contraband German booby trap. Slicker and Sgt. Collins then learn that Herbie has also smuggled Yvonne "Evey" LeBru, a French war orphan, aboard the ship. Evey is soon discovered by Christie and is put into the custody of Lt. Sylvia Hunter, a nurse who quickly becomes attached to the little girl. Upon arriving in New York City, Slicker and Herbie are taken to the Fort Dix separation center, while Evey is turned over to the U.S. Immigration authorities. Later, Evey learns that she is to be returned to France and after escaping the immigration officials, heads for Times Square, where Slicker and Herbie have gone back to their pre-war trade of selling neckties on the street corner. Evey finds her two foster-uncles just as they are about to be arrested by Collins, who has also returned to his pre-war profession as a police sergeant. With Evey disguised as a boy, Slicker and Herbie then go to the French consul, where they are told that Herbie must be married and employed before he can legally adopt the young girl. Evey suggests Sylvia as a possible mate for Herbie, but the nurse is already involved with Bill Gregory, a race car driver and designer. Instead, Slicker and Herbie become partners with Bill, even though his race car is being held in hock at Mulroney's Garage. After spending the night in a home-made hammock, pinned to a clothesline outside Sylvia's apartment, Herbie is nearly killed by a jealous husband, who accuses him of being his wife's lover. Acting on Slicker's challenge, the husband cuts the clothesline, sending Herbie crashing into Collins' apartment. The next day, Slicker and Herbie are duped by a crooked real estate salesman into buying a broken-down bus, in which they nevertheless set up housekeeping. Later, the two go to a local bank to apply for G.I. loans in order to finance Bill's car, but, thanks to their lack of automotive knowledge and Herbie's bungling, they are quickly turned down. Herbie suggests that they borrow the money from their old army buddies, and after some of the veterans meet with Bill, the necessary funds are raised. Collins then arrives to take custody of Evey, having traced the orphan through the real estate agent, but when he is accidentally knocked unconscious, Evey and the boys make their escape. Collins is suspended from the police force and, hoping to get his job back, privately stakes out the garage at which Bill's car is being held. After Collins falls asleep, Slicker, Herbie and Bill sneak into the garage and, after a brief fight with the disgraced policeman, tow the car away. Just before the big Gold Cup race, however, Bill, Slicker, Sylvia and Evey are arrested by the reinstated Collins. Herbie then takes the wheel of the midget racer and quickly looses control of it, leaving the racetrack. The police commandeer the limousine of Walter Appleby, an automobile magnate, to chase after Herbie, and Appleby is so impressed by the race car's performance that he orders twenty identical cars and two hundred engines. Bill and Sylvia are then given permission to adopt Evey, and Slicker and Herbie are offered positions with the police force, much to the dismay of Collins.
