Wealthy rancher Tex Jordan is accompanied by his pals, Third Grade Simms and Chihuahua Ramirez, on a cattle drive from Texas to a small town named Sundown past the Texas border. As they ride, Tex tells his friends of his plans to use the money he is about to make to finance a trip to England, but when they reach Sundown, brewing trouble between cattle broker Jack Hatfield and the small ranchers puts Tex's dream in jeopardy. Hatfield argues with cattlemen Andy Craig and Murdock about his below-market-value offer for their small herds. Craig angrily protests, especially when Tex demands and receives a fair price for his larger herd. Tex prevents Hatfield from shooting Craig in the back, then offers to buy Craig's cattle at a higher price, after which he will resell them to Hatfield. After Tex and Craig finalize their deal and Tex is walking away, however, Hatfield's henchman Ward shoots Craig. The dying rancher begs Tex to care for "Little Jo," his young, motherless child, and Tex readily agrees. When Tex, Third Grade and Chihuahua arrive at Craig's camp, though, they discover that Little Jo is short for Josephine, not Joseph, as they had presumed. Tex tells the little girl that her father is away on business and determines to find his killer. Two weeks later, Sheriff Tom Carpenter assures Tex of his continuing desire to arrest Hatfield for the murder, but insists that they must have solid evidence first. Tom's daughter Lois bitterly declares that the small town's troubles are due to the violent propensities of Texans, and her complaint appears to be valid when Tex and his friends become engaged in a gunfight by Ward and his men. Tex then goes to see Territorial Governor Brainerd, who endorses Tex's plan to establish a cattlemen's cooperative that will ruin Hatfield's business while helping the smaller ranchers. As they are discussing the idea, Brainerd receives word that Tom has been murdered, allegedly by one of Hatfield's gunmen. The governor appoints Tex as his special, undercover investigator, and Tex returns to Sundown to start the cooperative. All runs smoothly for Tex until Hatfield learns from Arthur Wilkes, his spy in Brainerd's office, that Tex is working for the governor. Hatfield then orders outlaw Red Carter and his gang to terrorize the ranchers and steal their cattle before they reach Sundown and Tex's cooperative. Chaos ensues as Carter's men attack the herds, until Tex receives word from Brainerd that Wilkes is a spy. Tex then plans to trap Hatfield by making him believe that he and Chihuahua have had a falling out. After staging a loud argument with Tex, Chihuahua is hired by Hatfield and soon gains the confidence of his henchmen. One of the men, Bradley, reveals that Ward killed Craig on Hatfield's orders, but before Chihuahua can notify Tex, Hatfield orders him to ensnare Tex in an ambush to prove his loyalty. Chihuahua manages to alert Tex to the danger, and during the ensuing fight, Tex apprehends the outlaws. Later, Hatfield is sentenced to be hanged for his part in the murders, and Tex signs over his share in the cattlemen's cooperative to Little Jo, with Lois as the trustee. The governor asks Tex to organize the territorial rangers upon his return from his European vacation, then settles down to a game of mumbly-peg with Little Jo.