Annie lives in an orphanage run by the sleazy and unpleasant Miss Hannigan. Annie was left at the orphanage by her parents when she was a baby and they promised to come back for her one day. This thought keeps Annie going and one day she decides to escape from the orphanage and look for her parents herself.

Sadly Annie is caught by the police and returned to the clutches of Miss Hannigan. She is about to be punished when Grace Farrell, secretary to millionaire Oliver Warbucks, arrives at the orphanage. He wants to give an orphan a Christmas holiday at his mansion and Grace chooses Annie.

Annie and Warbucks quickly hit it off and he agrees to help her find her parents by putting up a $50,000 reward. Miss Hannigan's brother, Rooster, and his girlfriend, Lily, pretend to be Annie's parents by using information provided by Miss Hannigan. At the last minute, President Roosevelt intervenes to announce that the FBI has discovered that Annie's parents are in fact, dead. In the end, Hannigan, Rooster, and Lily are all arrested and Annie is adopted by Warbucks.