Elwood P. Dowd (James Stewart) and his best friend Harvey are inseparable. They go everywhere together, spreading warmth and kindness throughout all the bars in town. The only trouble is that Harvey is a 'Pooka' - a six foot-plus rabbit that only Elwood can see. When Elwood and Harvey embarass the former's social-climbing sister Veta Louise (an Oscar-winning Josephine Hull) once too often, she finally opts to get Elwood the treatment she thinks he needs, and arranges to have him installed in the local mental asylum. However, Harvey's unseen but ever-felt presence ensures that all does not go according to plan.