Adapted from Johanna Spyri's novel, a little girl is taken from her hermit grandfather and helps a rich girl to learn to walk.
In Germany Dete (Mady Christians) takes her niece Heidi (Shirley Temple) to her grandfather Adolph Kramer (Jean Hersholt). He tells Dete to get out and ignores Heidi, who makes a bed on the hay and sings. Adolph silently gives her food. Blind Anna tells Pastor Schultz (Thomas Beck) how Adolph turned away his son and became a hermit. Adolph makes a chair for Heidi. She learns how to milk goats and works with him. Adolph tells Heidi a story of Nature (Shirley Temple), who sings of her wooden shoes. Pastor Schultz and the school-teacher Elsa ask Adolph about Heidi; but he says she won't go to their school or church. Adolph helps Heidi read of the prodigal son. While Pastor Schultz preaches about the lost sheep, Adolph and Heidi come into the church. Adolph asks the pastor to forgive him.
Dete comes for Heidi and takes her to Frankfurt without telling Adolph. Heidi thinks the butler Andrews (Arthur Treacher) is a king and meets Fraulein Rottenmeier (Mary Nash). Dete lies that Heidi is eleven, but Heidi says she is just eight. Dete demands fifty marks, but Rottenmeier tells them to go. Klara Sesemann (Marcia Mae Jones) in a wheelchair persuades Rottenmeier to let Heidi stay. At table Heidi makes fun of Rottenmeier. Adolph sells his clock and walks to Frankfurt. Klara gives Heidi a new dress, and Heidi encourages her to walk. Heidi lets a monkey in the window. Rottenmeier panics, and Andrews tries to catch it. Heidi lets in the owner, who takes it out. Klara stops Rottenmeier from punishing Heidi. Rottenmeier catches Heidi running away, but Klara asks her to stay two weeks till Christmas. Sesemann (Sidney Blackmer) arrives and sees that Klara is happy with Heidi. As a Christmas present Klara walks a little, saying Heidi taught her. Heidi tells Sesemann she wants to go home; but he offers her his home. Rottenmeier breaks Heidi's present, and Sesemann dismisses her.
Adolph looks for Heidi, and they hear each other; but Adolph is detained by the police. Rottenmeier takes Heidi to sell her. Adolph breaks out of jail, and Heidi runs away from Rottenmeier, who accuses Adolph of stealing her child. Adolph and Heidi in a sleigh are chased by police on horses. When police threaten to shoot, Adolph stops. Heidi tells the police captain to call Sesemann. In the final scenes Heidi shows Andrews how to milk a goat; Klara hikes with Heidi to Adolph, and they pray before eating together.
Once again a spirited child melts the hearts of adults or exposes their wickedness if they do not, showing that her cheerful attitude thrives with the poor as well as with the wealthy.