 Henry Pecket (Clem Bevans) keeps a land-bound, home-made sloop in the backyard of his boarding house ran by widow Sara March (Charlotte Greenwood), who is tolerant of the fancied trips around the world taken by her "ancient mariner" boarder. Little Nella Cairn (Connie Marshall,)another boarder, is his constant companion on the sloop s "trips." When her brother, Jeff Cairn (John Payne), enlists in the Navy, Nella is sent to board with a cousin, but is unhappy and returns to the boarding house. Pecket sends for Jenny (June Haver), a waitress for Mr. Agrippa (Oliver Blake) at his lunchroom and sweetheart of Jeff. Pecket and Jenny together decide to take care of Nella, when she receives a telegram from the War Department advising that Jeff is missing in action. To console the young girl, Pecket tells her they ll sail out to a wonderful island he knows about where he is sure Jeff can be found. The widow March, incensed about gossip she hears that Pecket is entertaining women guests on his boat, sells it to Mr. Agrippa, who wants to make a hamburger stand out of it. He has a man install wheels on it and plans to tow it away the next day. Pecket, Jenny and Nella have a meeting on the boat, a storm blows up, and since the sails are set, the "Sara March" puts out to "sea,", where it becomes "reefed" in a haystack. A young itinerant dentist, Howard Williams (John Ireland), offers to tow them but runs out of gas just as they reach Dignman s Ferry. He suggests they launch the boat, and all hands, including Williams, who comes in handy when they encounter a scientist in need of dental work, set sail on an enchanted voyage for Pecket s rendezvous island..to find Jeff.