Saloon owner Kent (Brian Donlevy), the unscrupulous boss of the fictional Western town of Bottleneck, has the town's sheriff, Keogh, killed when Keogh asks one too many questions about a rigged poker game. Kent and "Frenchy" (Marlene Dietrich), his girlfriend and the dance hall queen, now have a stranglehold over the local cattle ranchers. The crooked town's mayor, Hiram J. Slade (Samuel S. Hinds), who is in collusion with Kent, appoints the town drunk, Washington Dimsdale (Charles Winninger), as the new sheriff, assuming that he will be easy to control and manipulate. But what the mayor does not know is that Dimsdale was a deputy under the famous lawman, Tom Destry, and is able to call upon the latter's equally formidable son, Tom Destry, Jr. (James Stewart), to help him make Bottleneck a lawful, respectable town.
Destry confounds the townsfolk by refusing to strap on a gun in spite of demonstrating that he is an expert marksman. He still carries out the "letter of the law", as deputy sheriff, and earns their respect. A final confrontation between Destry and Kent's gang is inevitable, but "Frenchy" is won over by Destry and changes sides. A final gunfight ensues where Frenchy is killed in the crossfire, and the rule of law wins the day.