A Catholic school is falling apart, but a new priest and nuns praying for the new building next door are eventually rewarded by charity.
Father O'Malley (Bing Crosby) arrives at St. Mary's and learns the previous priest left because the sisters got their way. O'Malley meets Sister Superior Mary Benedict (Ingrid Bergman) and the sisters. Then he gives the students a holiday. Mary says they sold the playground. Horace P. Bogardus (Henry Travers) owns the new building, and he tells O'Malley to punish the children. Bogardus wants to buy St. Mary's and says it will be condemned. Mrs. Gallagher (Martha Sleeper) tells O'Malley that she wants her daughter Patricia (Joan Carroll) to board there, and he admits her. Mary urges Patricia to study. O'Malley stops a fight and declares Tommy the winner. Mary favors Eddie (Dickie Tyler) because he refused to fight. Mary buys a book on boxing and teaches Eddie. O'Malley helps Patricia on an essay and sings "Aren't You Glad You're You." He observes Mary's class, and Patricia reads her essay on the six senses.
Tommy trips Eddie, who fights him as Mary and O'Malley watch. Eddie wins and makes friends with Tommy. O'Malley leads the singing of "Adeste Fidelis." Mary has him watch a play rehearsal about Mary and Joseph trying to find a place to stay and Jesus' birthday. While O'Malley is talking to Bogardus, a baseball breaks his window. Mary comes over to apologize, and he shows her his building. She hopes that he will donate it to St. Mary's, and she asks the sisters to pray. Dr. McKay (Rhys Williams) tells Bogardus to rest. Bogardus hears the choir and imagines students there. O'Malley visits Mrs. Gallagher and brings in Joe Gallagher (William Gargan), who plays piano as O'Malley sings their song. Patricia goes to see her mother but sees Joe and leaves. Patricia cries during an exam. Mary tells O'Malley that only Patricia failed. He suggests she pass, but Mary does not want to lower their standards. Patricia learns she failed and returns her dress.
Mary is not well and learns that O'Malley may have St. Mary's torn down. Dr. McKay says that Bogardus is not sleeping well, and O'Malley asks him to help Bogardus be more generous. O'Malley urges Bogardus to do good. Bogardus helps a dog that follows him into church, where he prays. Bogardus asks Mary to accept his building. O'Malley sings "The Bells of St. Mary's" with Mary and the sisters. Dr. McKay tells him that Mary has tuberculosis and asks that she be sent away without explanation. O'Malley says he has disagreed with her but acknowledges that her health is more important. O'Malley tells Mary that she is being replaced. Mrs. Gallagher and Joe come for the graduation. Patricia tells Mary that she wants to be a nun and says she failed so that she could stay there. O'Malley introduces Patricia to her father, and she is going to have a real home. Mary tells Patricia to get ready for graduation at which O'Malley thanks Bogardus. Mary prays in the chapel and says goodbye, and O'Malley explains that she has tuberculosis.
This spiritual drama reflects the difficulties of religious
schools in the modern world but suggests that miracles of human
charity are still possible. The priest and the sister superior
found that they could disagree and still respect each other.