Affable tippler Elwood P. Dowd (James Stewart) lives with his sister, Veta (Josephine Hull), and her bashful daughter. They hate his drinking, but what rankles them more is his faithful companion: a 6-foot-tall invisible rabbit named Harvey. Elwood's embarrassing flight of fancy is foiling Veta's plans to marry off her daughter, so Veta decides to commit Elwood. But when she confesses she's seen Harvey, the doctor institutionalizes Veta instead!