In 1933, during the Great Depression, a young orphan named Annie is living in the Hudson Street Orphanage in New York City which is run by Miss Hannigan, a cruel alcoholic who forces the orphans to clean the building daily. With half of a locket as her only possession, she remains optimistic that her parents, who left her on the doorstep as a baby, will return for her. Annie sneaks out with help from a laundry man named Mr. Jules Bundles and adopts a stray dog which she names Sandy. Unfortunately, Annie is returned to the orphanage shortly after by a police officer.
Grace Farrell, secretary to billionaire Oliver Warbucks, arrives to invite an orphan to live with Warbucks for a week in order to improve his public image. Annie is chosen and she and Sandy travel to Warbucks's mansion where they meet his many servants and two bodyguards Punjab and the Asp. Initially dismissive of Annie due to her being female, Warbucks is charmed into letting her stay to which he takes Annie and Grace to the Radio City Music Hall to watch a movie while beginning to develop affection for Annie. Grace urges him to adopt Annie and he meets with Miss Hannigan, convincing her to sign the adoption papers while Hannigan drunkenly seduces him.
Warbucks reveals his plans to Annie, even offering her a new locket, but she declines. She explains the purpose of her broken locket and her hope that her parents will return with the other half. Warbucks appears on Bert Healy's radio show and offers $50,000 to find Annie's parents. This causes mass hysteria with many would-be parents appearing to claim the money. To escape the madness, Warbucks flies Annie to the White House and introduces her to President Franklin D. Roosevelt and his wife Eleanor. Roosevelt informs them of his plan to introduce a social welfare program to help America's impoverished and asks Warbucks to head it; Annie encourages him to help. Upon returning home, Annie is disheartened when Grace reveals none of the potential parents knew about the locket.
Miss Hannigan is visited by her con artist brother Rooster and his girlfriend Lily St. Regis; they plot to pose as Annie's parents to gain the reward. The trio search the orphans' belongings and Miss Hannigan reveals Annie's parents died; she possesses the other half of the locket. Annie's friends overhear the conversation and try to sneak out, but are caught and locked away. Rooster and Lily succeed with the ruse and Annie is kidnapped minutes after leaving the mansion, but her friends reach Warbucks and tell him the truth; he informs the police, who begin a citywide search.
Annie convinces the felons to pull over, only to escape and destroy Warbucks's check. Rooster chases Annie up a raised railroad bridge in an effort to kill her; Miss Hannigan never wanted Annie hurt and attempts to stop her own brother, but Rooster knocks her out. Punjab is able to rescue Annie, reuniting her with Warbucks and Grace. Rooster and Lily are arrested while Annie is officially adopted by Warbucks. At a party in which the orphans, a redeemed Miss Hannigan and the Roosevelts attend, Warbucks gives Annie the new locket and she embraces her new father.
