Richard “Ragged Dick” Hunter, who has spent the night sleeping in a straw-lined box, is woken up by a stranger. Dick is surprised to learn that it’s already seven o’clock and laments having stayed up so late at the theater the night before. The stranger asks where Dick came by the money for the theater. Dick ensures him that it wasn’t stolen: he earned the money honestly, through shining shoes with his trusty bootblacking box.
Rising quickly, Dick prepares to begin his day. His clothing is in tatters and his face and hair are dirty. Still, his “frank, straight-forward manner” and good looks enable him to quickly find customers. His first client is Mr. Greyson. When it comes time to pay, however, Dick finds himself unable to make change. Mr. Greyson tells Dick to drop the money at his office later, though he notes to himself that it’s unlikely Dick will do so.
Soon, Dick has secured the funds necessary for breakfast, which he eats at a local restaurant that caters to bootblacks. While Dick is polishing this scant meal off, his friend Johnny Nolan enters the restaurant. Johnny can’t afford breakfast, so Dick buys one for him. After finishing, Dick tells his friend that he’d be able to afford his own meals if he weren’t so lazy.
Dick’s next customer also needs change that Dick is unable to provide, and Dick is forced to ask for it from the clerk at a nearby store. However, the clerk declares Dick’s bill to be a fake and threatens to call the police. Dick tells the clerk that he either has to have the change or have the bill back for his customer, but the clerk remains adamant. Eventually, it’s discovered that the clerk had kept the original bill and substituted it with his own counterfeit. He is fired, and Dick’s customer rewards him for his trouble.
That same day, Dick stumbles on Mr. Whitney and his nephew, Frank. Mr. Whitney has to work, so the two are trying to decide how Frank ought to spend his time. Dick overhears their conversation and offers to serve as Frank’s guide around New York City. Though they express some concern about his appearance, the two decide that Dick will make a fine guide. First, however, they present him with one of Frank’s old suits—still in good shape—and let Dick wash up in Frank’s hotel room. These alterations produce a remarkable change in the bootblack, who now needs only a hat to look like a proper young gentleman.
Dick leads Frank into an area of the city where the two can buy a hat. After obtaining one, Dick leaves his old one in the street, where it’s quickly picked up by another bootblack. Properly dressed, Frank and Dick begin their sightseeing in earnest.
On the tour, Frank learns that both of Dick’s parents died before he was seven years old, leaving him on the street. Frank also learns about the dismal state of Dick’s education—he’s never read the Bible, as he can barely read at all. But Frank also learns about the boy’s street smarts, including Dick’s ability to deal with the various conmen who prowl the city. When one such conman attempts to swindle twenty dollars from the boys with an elaborate scam involving a wallet full of fake cash, Dick handles him with aplomb.
Throughout their tour, Frank implores Dick to seek out an education, to stop gambling, and to save his money so that he can live a more respectable life, something Dick says he desires greatly. Eventually the boys head to Wall Street, where they encounter a young country bumpkin who had come into the city to deposit his life’s savings, fifty dollars, only to be scammed out of his money by a con artist. Frank and Dick help the bumpkin call the police, but seem certain he won’t get the money back. Unsure how to help further, they continue on their tour, boarding a ferry to Brooklyn. Within moments Dick spots the con artist, and threatens to turn the man over to the police if he doesn’t return the money. The man instantly complies and the two boys return the money to the bumpkin. Afterwards, Frank decides it’s time to return to his uncle.
Back at the hotel, Dick again meets Mr. Whitney, who congratulates the shoeshine boy on his improved appearance. Whitney echoes Frank’s sentiments that Dick should save his money, apply himself, and seek out an education. Before Dick departs, Mr. Whitney gives him a five-dollar bill. He only asks that Dick repay the favor to some unfortunate lad when he’s successful enough to have left the shoeshine business behind.
Dick’s first purchase with his windfall is a substantial meal at a respectable restaurant. It’s the kind of place, he notes, that would have turned him away in his previous clothing. He then decides to use more of his money to rent a respectable room, and later that night finds himself at the house of Mrs. Mooney, who becomes his landlord. He goes to bed early—in a bed of his very own—so he can attack his work day well-rested.
Dick decides that from now on he’ll shine shoes in his new suit, which proves a great boon for his business. However, he soon attracts the attention of Micky Maguire. Maguire, a prison-hardened bootblack who takes issue with anyone of his class “putting on airs,” and tries to fight Dick. Dick holds him off handily and Maguire retreats.
The next day, Dick takes the remaining money from Mr. Whitney, along with some of his new earnings, and establishes a savings account. It’s in the midst of this that he remembers that he’s neglected to give Mr. Greyson back his change. Dick quickly makes his way to the man’s office. Greyson, impressed by Dick’s honesty, invites him to the Sunday School class he teaches, and Dick agrees to come.
At dinner that night, Dick comes across Fosdick, another homeless bootblack who doesn’t have money for supper. Dick treats the boy to it, then, realizing that Fosdick will otherwise be sleeping on the streets that night, invites him to stay in his room. Dick learns that Fosdick is quite well educated and strikes a deal with the boy, offering to let Fosdick live with Dick if the boy will tutor him. Fosdick agrees, and on the way home they procure a newspaper to use as a reading primer. Later on, Fosdick and Dick also begin attending Mr. Greyson’s Sunday School.
The lessons go well, with Fosdick remarking on Dick’s remarkable progress. Dick asks Fosdick why, with his advanced education, he doesn’t try to get a better job than shining shoes. Fosdick says that it’s mostly his clothes and appearance holding him back. To remedy this, Dick buys him a new suit. The new set of clothes transforms Fosdick the way Dick’s new clothes transformed him. After some initial struggles—and with the help of a good word from Mr. Greyson—Fosdick finds a job as a clerk in a store.
Months pass uneventfully, when one day Dick stumbles on Tom Wilkins, whose family are about to be evicted from their home because they can’t pay the rent. Dick offers to pay but doesn’t have the cash on him. He returns home to get his bankbook only to discover that it’s missing. Terrified that his money has been stolen, Dick consults with Fosdick and Mrs. Mooney. Together, they come to the realization that the thief was likely Jim Travis, another tenant. The next day, Dick makes his way to the bank and explains the situation. When Travis later arrives to withdraw the money, he is arrested, and Dick is able to give Wilkins the money he needs.
Shortly after the events with Travis, Dick receives a letter from Frank Whitney. Frank remembers Dick fondly and wants to know how he’s doing. The letter touches Dick, who credits Frank with having given him the will to learn how to read, save money, and rent a place of his own. Dick determines to write a letter in response, which he does with some help from Fosdick.
One day, on the ferry to Brooklyn, Dick witnesses a young boy fall into the water. Without hesitation, Dick jumps in after him and rescues the child. The boy’s father, Mr. Rockwell, repays Dick handsomely first with a new set clothes and then again with a career at his counting-house. The man offers Dick the starting weekly salary of ten dollars, and Dick eagerly takes the job. He keeps his bootblacking box as a souvenir of his past, as he and Fosdick discuss moving into a more suitable, middle-class apartment.