Based on Hubert Osborne's play and with songs by Irving Berlin, two sailors romance two sisters, but only half of each pair is eager to marry.
Baker (Fred Astaire) and sailors sing "We Saw the Sea." On liberty in San Francisco Baker goes to a dance hall. Connie Martin (Harriet Hilliard) with glasses needs an escort and gets Bilge Smith (Randolph Scott) to bring her in with his beer. Sherry Martin (Ginger Rogers) sings "Let Yourself Go" and is glad to see Bake. Kitty (Lucille Ball) helps Connie look beautiful, and Bilge picks her up. Connie sings "Get Thee Behind Me, Satan." Bake and Sherry win a dance contest. Connie cooks for Bilge and says she has her late father's ship. Bake says he is Sherry's manager and gets her fired. Bilge kisses Connie goodnight but goes out with Mrs. Iris Manning (Astrid Allwyn).
The fleet sails, and Bake gives the sailors dancing lessons on the deck. Connie and Sherry pay to get their father's ship repaired. Bake conducts and sings "I'd Rather Lead a Band" and then tap dances. The fleet returns, and Connie cooks. Bake calls for Sherry, who comes home late to find Connie alone. Sherry dances in an audition for Jim Nolan (Russell Hicks). Outside Bake waits and puts bicarbonate of soda in water for the person auditioning. Sherry drinks it and sings with the hiccups. Bilge and Bake arrive at Iris's party. Bake tells Sherry what he did to Nolan's auditioner, and she vows to get even. Bilge sees Connie but lies that he had to stay on board. Connie sings "But Where Are You?" Sherry pretends to be hurt and gets Bake to fight an officer, who throws him in water and orders him back to his ship. Connie sees Bilge kiss Iris. Bake takes a monkey and roses to Sherry, who tells him Connie is going home. Sherry takes Bake to their ship; Connie needs $700 to pay Captain Hickey. So Bake gets old costumes to put on a show. Bake and Sherry sing "I'm Putting All My Eggs In One Basket" and dance. Bake asks Iris to be in the show and put on a negligee for rehearsal. Bilge comes in and sees the scene Bake wrote, gets jealous, and then leaves.
Bilge tells Bake that his liberty is canceled, but Bake hits Bilge and goes anyway. Bilge is sent to arrest Bake. On her ship Bilge tells Connie he wants to start again. Bilge arrests Bake, who tells him it is Connie's ship. Bilge lets Bake do the show. Bake performs "Let's Face the Music and Dance" with Sherry. Connie and Bilge plan to sail the seas as a couple, and Bake gets Sherry to ask him to marry.
The Navy setting foreshadows the trouble ahead, but meanwhile they are happy facing the music and dancing. The story implies that all four could be very happy after the Navy stops keeping them apart.