Based on a play by VMI graduates Fred Finklehoff and John Monks, three senior cadets at VMI bend the rules with their girl-friends.
Bing Edwards (Eddie Albert) is the star pitcher at the Virginia Military Institute. Joyce Winfree (Priscilla Lane) arrives to stay with her grandmother. Billy Randolph (Wayne Morris) has Townsend (Johnnie Davis) send flowers to Joyce and calls on her with Bing, who gives Billy his money to deposit so his check won't bounce. Billy tells Joyce how he can sneak out late and leaves with her. Visitor Claire Adams (Jane Wyman) is shy with Bing while he waits for Kate. Harley (Larry Williams) arrives with flowers for Joyce, but Bing has Harley take Claire. Bing kisses Kate Rice (Jane Bryan), who says she is going to have a baby. She is going away so he won't be expelled for being married. In the drill Bing marches aside to see a baby and gets a penalty. Harley tells Billy to stay away from Joyce. Billy tells Dan Crawford (Ronald Reagan) he is betting Bing's $50 on the baseball game. Billy gets Dan to go out with Claire and hints they should take a walk so he can be alone with Joyce. Billy spills lemonade on his pants. Claire's father Col. Ramm (Henry O'Neill) comes in, sees Billy without pants, and puts him under arrest.
Billy hazes Misto (William Tracy) as a rat. Col. Ramm arrests catcher Dan too. Billy gets money by pawning jewelry and a sword to bet against VMI to come out even. Bing pitches badly and is hit in the head. Billy and Dan learn it was too late to bet. Col. Ramm arrests Bing for a bad check and pawning his saber. Claire tells Bing and Dan that she is working on her father but that Bing was busted. Dan kisses Claire. Billy, Dan, and Bing walk penalty tours from April to June. Billy visits Kate at the maternity ward. Billy and Dan sneak Claire in to help Bing with chemistry. Col. Ramm comes in, but Claire hides. Billy and Joyce bring in food. Harley catches them, but Claire says her father won't like it. Billy goes in to see Bing's chemistry grade and says he failed; but Bing learns he got 84 and is happy until he learns Harley won the athletic prize he expected. A telegram informs Bing that Kate had a boy. Dan and Billy name him Commencement, and Bing will get a $300 prize. In the final scene Bing gets his diploma and gives Col. Ramm a cigar.
Crazy Billy gets himself and his room-mates into various predicaments; but Bing is worried he'll be expelled for being married or won't pass. These antics are contrasted to strict military discipline, implying that their free spirits are superior to the regimentation.