Darby O'Gill seems to be as full of blarney as any old codger in Ireland, but the stories of leprechauns he tells at the pub are true. In fact, he and the tiny King Brian, ruler of the little people, are friendly adversaries, continually out-foxing each other. Darby needs a bit of magical help from the wily king when Lord Fitzpatrick replaces him as caretaker with the handsome, strapping young Michael from Dublin. Michael falls in love with Darby's beautiful daughter, Katie, which is all right with Darby; but the lad has a rival in a local ruffian, the son of a devious widow who wants her boy to be the caretaker. King Brian's supernatural assistance is necessary to make everything come out all right, but the sneaky leprechaun won't play matchmaker without a fight. Finally, real trouble comes in the form of the Banshee, and Darby will need all his quick wits to save his daughter from the wicked spirit.

Sean Thornton has returned from America to reclaim his homestead and escape his past. Sean's eye is caught by Mary Kate Danaher, a beautiful but poor maiden, and younger sister of ill-tempered "Red" Will Danaher. The riotous relationship that forms between Sean and Mary Kate, punctuated by Will's pugnacious attempts to keep them apart, form the main plot, with Sean's past as the dark undercurrent.