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In 1840, the village of Thrums, Scotland, whose main industry is weaving, anticipates the arrival of its new minister, Gavin Dishart, with enthusiasm. Although small in stature, Gavin quickly impresses the townspeople with his inspired sermonizing and prudent, firm ways. The villagers are especially impressed when Gavin convinces Rob Dow, Thrums's most notorious drunkard, to give up alcohol. Gavin's quiet world is threatened, however, by the unhappy relations between the Thrums weavers and the area manufacturers, who by forcing prices down, have driven many villagers to poverty and violent protest. Gavin also is unnerved when he meets Babbie, a high-spirited young woman dressed like a gypsy, in the woods. Actually the well-educated fiancée of Lord Milford Rintoul, whose estate overlooks the village, Babbie flirts boldly with Gavin and plays the part of the wild gypsy to the hilt. While she bewitches the inexperienced Gavin, Rintoul, who is in cahoots with the manufacturers, arranges for a group of soldiers to raid Thrums and round up the militant labor leaders. Aware of Rintoul's plan, Babbie tricks Gavin into sounding an alarm that alerts the villagers to the arrival of the soldiers. Although he at first decries the ensuing rock and mud throwing, Gavin finds himself tossing divots at the soldiers alongside the feisty Babbie. After the melee, Gavin goes to Rintoul and entreats him to be lenient with the weavers. Rintoul, however, is concerned only with capturing the "gypsy," oblivious to the fact that she is his fiancée. Babbie further confuses Gavin when she intercedes on behalf of Nanny Webster, an old woman threatened with the poorhouse. By pledging to give money to Nanny, Babbie is able to meet with Gavin alone and finally forces him to confess his attraction for her. Gavin's increasingly distracted behavior creates anxiety in the villagers, who fear that he has fallen in love with the wrong sort of woman. Rob Dow even returns to drinking when he sees Babbie and Gavin together, convinced that his moral mentor has himself been led astray. Then when Rob Dow's son Micah reveals to Babbie that his father is drinking and beating him because of her and that Gavin's career will be ruined by their romance, Babbie decides to end the relationship and marry Rintoul within the fortnight. On the eve of her wedding, a heartbroken Babbie goes to Nanny's to say goodbye and there is reunited with an equally miserable Gavin. After revealing to Gavin her true identity, Babbie describes how Rintoul found her as a little girl, abandoned by her gypsy tribe, and reared her as his ward. Gavin convinces her that once Rintoul, whom Babbie has agreed to marry only out of gratitude, learns of their love, he will release her from her promise. Before Gavin and Babbie can notify Rintoul of their decision, however, the church elders vote to dismiss Gavin and go to his house to confront him. There they find Babbie alone with Gavin's kindly old mother and are unable to break the news. Gavin, meanwhile, is accidentally stabbed by Rob Dow at the church and is carried home, near death. Before collapsing, Gavin defends Babbie to the elders, who finally realize that their little minister is in love with a fine woman. The next morning, Rintoul releases Babbie to marry the recovering Gavin, and she rushes to his bedside.