Finian McLonergan arrives in Rainbow Valley,, with his daughter, Sharon, and a "borrowed" pot of gold. His theory is to plant the gold near Fort Knox. Surely it will multiply just as America's bullion burial has made all Americans rich. They encounter poor sharecroppers who are about to lose their land. Henchmen of Senator Billboard Rawkins are ready to pay back taxes and take over. However, his plan is foiled by Woody, who returns from the big city with the tax money, and by Finian, who covers the hidden charges when Woody cannot. In exchange, Finian gets property rights for enough land to sow his golden dream.
While Sharon and Woody are falling in love, Og, a leprechaun, confronts Finian and demands the return of his pot of gold, without which he will start to become human and mortal. But Finian ignores him, as a figment of his imagination. Geologists, working on a secret dam project, detect gold on the sharecroppers' land. Learning this, Rawkins moves in to take the land by force. As he is manhandling a Negro sharecropper, Sharon wishes that Rawkins was black. Unwittingly, she is standing over the magical pot, and her wish is granted. Rawkins dashes into hiding.
A telegram arrives from Shears and Robust granting unlimited credit to the people of the gold-rich valley. Woody persuades them to use the credit to buy tractors and equipment to improve the harvest. Without his gold, Og will become mortal. However, his search for the pot is interrupted by Sharon with whom he immediately falls in love. When Shears and Robust arrive to collect for all the merchandise, Woody satisfies them with proof of future profit. The McLonergan economic theory is working, but Sharon is charged with witchcraft and the mysterious disappearance of Rawkins. Og encounters Billboard in the woods and magically improves his disposition. Arriving back in the Valley, Og encounters Susan the Silent. Love strikes again, only harder. He also learns Sharon is to be burned as a witch unless a white Rawkins can be found. Og believes Susan can tell him where the gold is hidden and so wishes. She talks. He is sitting above the crock. He unearths the pot and makes the final wish that saves Sharon for Woody, but renders himself completely mortal. But Og has Susan. Finian, having proven his theory without a shadow of doubt, moves on to spread joy elsewhere.