Mary Chase adapted her play about a pleasant man with an invisible friend who may be committed to a sanitarium by his sister.
Elwood P. Dowd (James Stewart) seems to have an imaginary friend. His sister Veta Louise Simmons (Josephine Hull) calls Judge Gaffney (William Lynn) to keep Elwood away from home so that her daughter Myrtle Mae Simmons (Victoria Horne) may enjoy a party. At a bar Elwood learns of the party and goes home. Elwood introduces Harvey to his aunt Ethel Chauvenet, and she leaves. Myrtle Mae packs to leave, and Veta calls the Judge.
Veta takes Elwood in a taxi to the sanitarium. Miss Kelly (Peggy Dow) tells Wilson (Jesse White) to take Elwood to a room. Veta tells Dr. Sanderson (Charles Drake) that Elwood drinks, and she wants him committed. Veta says that Harvey is a six-foot rabbit she has seen, and she cries. Dr. Sanderson orders Wilson to take Veta to a room, and Wilson has to carry her. Dr. Sanderson scolds Miss Kelly for putting Elwood in a room. He tells Elwood that Veta is sick and is being committed. Elwood invites Dr. Sanderson and Miss Kelly to meet him when they get off at ten. In the garden Elwood tells Mrs. Chumley about Harvey. Elwood invites the gatekeeper for dinner.
Dr. Chumley (Cecil Kellaway) orders a shot for Veta. Dr. Chumley hears his wife tell about Elwood and Harvey, and he informs Dr. Sanderson that he released a psychopath. Dr. Chumley and Wilson go looking for Elwood. At home Veta asks the Judge to sue them because Wilson took off her clothes to give her a bath. Wilson walks in. Veta runs upstairs, and Wilson woos Myrtle Mae, who takes him to the kitchen to feed him. Elwood comes home and unwraps a painting of Harvey and himself. Dr. Chumley arrives and learns that Veta wants to sue him.
Elwood calls, and Veta sends Dr. Chumley to the bar. Fired Dr. Sanderson says goodbye to Miss Kelly, and they quarrel. Wilson takes them to the bar, and Elwood gives flowers to Miss Kelly. Elwood tells what happened to Dr. Chumley, and he gets Dr. Sanderson to dance with Miss Kelly. Elwood tells them how he met Harvey. Wilson arrives with police, and they take Elwood.
Drunk Dr. Chumley enters the gate and is followed by Harvey. The others arrive, and Dr. Chumley talks with Elwood in his office about the pooka Harvey, who has magical powers. Dr. Chumley lays on his couch and tells his wish. Elwood asks him where Harvey is. Dr. Chumley warns Elwood that Veta is committing him. The Judge, Veta, and Myrtle Mae arrive. Dr. Chumley promotes Dr. Sanderson, who asks Elwood to take a serum. Elwood declines. Veta tells Elwood that she and Myrtle Mae are miserable because of Harvey. So Elwood agrees to take the serum. The taxi driver (Wallace Ford) asks to be paid, but the Judge and Veta don’t have money. Veta asks Elwood to pay him. Veta decides to stop the injection. Elwood invites Wilson for dinner and says he and Myrtle Mae are a nice couple. Outside Elwood finds Harvey. Dr. Chumley asks Elwood to let Harvey stay with him, and Elwood agrees. However, Harvey decides to go with Elwood.
This fantasy comedy is about a man who shows the value of human kindness by maintaining a pleasant attitude to all. Modern psychiatry is also satirized while some characters try to solve their own anxieties and problems by getting rid of someone else.