Out on the streets, a gamin (Paulette Goddard), a young orphaned girl, is "a child of the waterfront, who refuses to go hungry." In her first appearance in the film, the poor gamin steals a bunch of bananas from a case on board a freighter, and shares them with other waterfront kids on the dock. She returns home to support her family - she shares her food with her motherless, hungry younger sisters and her unemployed father.

"Held as a communist leader, our innocent victim languishes in jail." In prison, he meets his brutish cellmate. During a jailhouse lunch, a drug squad is "searching for smuggled 'nose-powder.'" Knowing he might be caught, another drug addict inmate stores his "snow"/cocaine in a salt shaker in the mess hall during a raid. In the lunch room, the Tramp liberally applies salt to his food, inadvertently taking a massive dose of the "joy powder." Out of step (literally and figuratively) with everyone else on his way back from the prison dining room to his cell in the regimented line of marching convicts, he spins and pirouettes, takes a wrong turn, and gets lost. When he eventually finds his way back to the cell corridor, he walks into a jailbreak in progress. With superhuman strength and fearlessness derived from the powder, he dodges gun fire and unwittingly averts the attempted jailbreak. He knocks out the escaping convicts and releases the guards that have been locked in a cell - to save the day.

"While outside there is trouble with the unemployed." Hearing a gun shot in the streets, the gamin finds that her father has been tragically killed in a riot. "The law takes charge of the orphans." Juvenile child-care authorities break up the gamin's family after her father's death. They snatch her younger sisters away to take them to the "proper" authorities, but she escapes.

"Happy in his comfortable cell," prison officials reward the Tramp with his own private jail cell. He is enjoying all the modern comforts of home - reading a newspaper announcing "STRIKES AND RIOTS," when he is abruptly summoned by the sheriff. While waiting in the prison office, "the minister and his wife pay their weekly visit." Sharing tea with the very proper woman while the minister attends to his duties, the Tramp experiences embarrassing gurgling noises. Later, the sheriff grants him his freedom with a pardon, although the Tramp is fearful of the outside, frightening world (of economic difficulty) and requests: "Can't I stay a little longer? I'm so happy here."

Back on the street, the Tramp uses an enthusiastic letter of recommendation from the sheriff, calling him "an honest and trustworthy man," to get work in a shipyard. After being accepted, the foreman orders him to find a large wedge - with a sledgehammer, he removes the one from beneath the hull of a ship that is being built in dry-dock. He accidently and prematurely "launches" it down a slide into the harbor, successfully sinking a half-finished ship. The Tramp promptly leaves, knowing that he will be fired anyway.

He is "determined to go back to jail." "Alone and hungry," he finds that life outside prison is fraught with perils. So he tries - vainly - to get arrested again. He attempts to take the blame when the gamin, on the run from child-care and police authorities, knocks into him as she is trying to flee after grabbing a loaf of bread from a baker's van for her hungry siblings. He tells the baker and the policeman: "No, she didn't - I did." But the ploy doesn't work when a female witness testifies: "It was the girl - not the man." And the gamin is arrested.

The Tramp tries another strategy to get arrested. He enters a cafeteria and orders a large meal that he obviously cannot pay for. He enjoys the meal, and then announces that he is unable to pay the tab to the person at the cash register. He has alerted a policeman to be present. As he is being arrested, he also "purchases" some cigars from a cigar stand outside. This time, he is successful and is jailed for both offenses. On the way to the lockup in the same paddy wagon, he and the gamin meet. He asks her: "Remember me - and the bread?" The perfect gentleman, he offers her his handkerchief for her tears. They both seize a chance to escape when a fortuitous swerve to avoid an accident occurs and they fall out the back. "Now is your chance to escape!" he encourages. Rather than go to jail, he decides to follow the gamin and they both reach the outskirts of the city.

As they sit and flirt on a curb in a residential community, she tells him that she lives "no place - anywhere." They notice a suburban couple parting outside their home, and the Tramp asks:

Can you imagine us in a little home like that?

They enter into an idealized dream sequence, dreaming of everyday life - it is an Everyman vision of the perfect home in a capitalistic society. They collectively imagine, through a dissolve, their happy life together in a bright cheery home. He plucks an orange from a nearby tree just outside the window. Grapes are visible beyond the kitchen door, easily plucked. An obliging cow is quickly summoned outside the kitchen door, always available for fresh milk. And a steak is cooking on the stove. The Tramp is inspired to promise: "I'll do it! We'll get a home, even if I have to work for it." They are brought back to the rough reality of their situation when a policeman motions them to move along.

Later, he applies for a job as a night watchman in a department store, to replace the present watchman who has had an accident and broken his leg. The manager is told: "Give him the job and show him his duties" after he has presented his sheriff's letter of recommendation. The Tramp sneaks the shivering and cold gamin into the back entrance of the store. They stock up with sandwiches and cake from the food counter. On the Fourth Floor, the Toy Department, to amuse her, the Tramp performs a risky, blind-folded rollerskating act. He brags: "Look! I can do it blindfolded!" He skates circles nearer and nearer to the edge of a balcony with a missing railing. On the Fifth Floor, in the Bedroom Display, the Tramp warms her with a white fur coat and tucks her safely into one of the store's luxurious beds. As he must go around the store and punch the time clocks, he promises: "Now go to sleep and I'll wake you up before the store opens."

Then while on his rounds, wearing roller-skates, the Tramp stumbles into a gang of burglars (Stanley Sandford, Hank Mann, and Louis Natheux). They order him: "Stay where you are!!!" but he finds that impossible on a moving escalator. One of the burglars, Big Bill, "recognizes a fellow-worker from the steel mills." Realizing their common circumstances, they tell him: "We ain't burglars - we're hungry." They indulge themselves in the food department. "The next morning," the gamin wakes up by herself and rushes out of the store. At 9:30, after the store has reopened and the Tramp awakens on top of the counter in the women's apparel department, where he has been discovered by a store clerk and a customer. He is taken away by police in a police patrol wagon and finds himself in jail once again. "Ten days later," he is released and the gamin is there to greet him. She is overjoyed to see him, and smiles: "I've got a surprise for you. I've found a home."

He follows the gamin to a run-down, dilapidated lakeside shack where he gives the home a name: "It's Paradise." The ramshackle cabin provides a few visual gags - a beam falls on the Tramp's head when he shuts the door behind him, and a table collapses when he leans on it. Propping up sagging roof beams, the gamin says: "Of course it's no Buckingham Palace." He falls into the lake behind the shack when he leans on the back door. He sleeps outside in the doghouse for the night and the next morning attempts swimming, diving head first into two feet of water. There, they set up a home. As his relationship evolves with the resilient, homeless gamin, he establishes a friendly, protective and loving relationship with her.

Entering the shack for a fine breakfast she has prepared, the front door beam swings into his head again, and his dining table chair sinks into the rotten floorboards. Their meal consists of large pieces of uncut bread and open tin cans of liquid. He opens the Daily News and sees the headlines that his old factory is reopening and rehiring: "FACTORIES REOPEN! MEN TO BE PUT TO WORK AT THE JETSON MILLS THIS MORNING." Above the newspaper's banner, a title reads: Prosperity Has Turned the Corner. He jumps up suddenly, fetches his derby hat, and points toward the door: "Work at last!" He promises: "Now we'll get a real home!" He can hardly contain himself as he eagerly runs off to the factory. The gamin waves goodbye expectantly.

Upon reaching the factory, he must push his way through hundreds of other workers in the crowd seeking employment. He is the last one to sneak through the gate to be offered a job. He becomes the mechanic's (Chester Conklin) assistant: "The mechanic and his new assistant put to work repairing the long idle machinery." With a large oil can and tool box, they begin to tackle the problem. In a comedic sequence, the oil can and the mechanic's coat (and a pocket watch in the coat pocket) are pressed flat. The mechanic is understandably upset: "My family heirloom ruined!"

They try to set the huge machine in motion. They climb up onto the massive machine, succeeding in crushing the tool box between two large rotating gears, after which it spits out tools like it was suffering from indigestion. Then the machine malfunctions, catching his boss in the cogs of the machine. The boss passes through the entire transport system, and emerges at various points in the wheels. The mechanic cries to his assistant: "Get me out of here!" The boss shouts more directions: "Pull that lever" and "Hold it!!", trying to extricate himself from being stuck in the gears and sprockets.

When the lunch break whistle sounds, the Tramp attempts to serve lunch to his half-swallowed boss - almost impossible since the boss's head is the only body part sticking out of the machine. Ingenuously, the Tramp uses a funnel to direct coffee from a thermos into his mouth. A whole roasted chicken and a piece of pie are somewhat more difficult. After lunch, the workers go on strike, which puts the Tramp out of work and back on the streets where police prohibit gathering of workers. The Tramp is pushed around for loitering, and then accidentally steps onto a board that propels a brick into the head of a policeman. He is severely beaten and off to jail yet again.