On the day that his father Hugh is to marry Ann, little Danny Mitchell, resenting his new stepmother and longing for his deceased mother, seeks solace at a creek. Hugh drives to the creek to persuade Danny to attend the ceremony, but his car breaks down, and while Danny explores the surrounding woods, Hugh calls a mechanic. At a farm owned by returning war veteran Will Nelson, Danny comes upon Rusty, a vicious German Shepherd. Father and son then drive home and after the ceremony, the newlyweds depart on their honeymoon, leaving Danny in the care of Louise Hover, Ann's best friend. While chasing the honeymooners' car, Danny's little dog Skipper is struck and killed by an oncoming truck. When Ann and Hugh return home from their trip, they find Danny still grieving for Skipper and resentful of their marriage. Lonely, Danny wanders back to the farm and Nelson explains that Rusty understands no English because he was a German army dog. One day, neglected and misunderstood, Rusty jumps the fence of his pen and injures his leg. Danny, playing in the woods, finds the injured dog, bandages his leg and takes him home, hiding him in the cellar. That night, Hugh is confounded by Danny's requests to translate phrases from English to German until Danny finally tells him about the canine in the basement. Although Hugh insists that Danny return Rusty to his owner, Ann tries to convince her husband to allow the boy to keep the dog. The next morning, Danny reluctantly takes Rusty back to the farm, and Nelson, impressed by the boy's concern, gives the dog to him. Later, at the Mitchell house, Ann confides to Louise her disappointment over Danny's rejection. When Louise suggests taking Danny to see Dr. Banning, a prominent psychiatrist, Danny overhears their conversation and decides to take Rusty to the doctor. After hearing about Rusty's problems, Dr. Banning advises Danny to ignore the dog and only reward him for good behavior. Later, Ann visits the doctor about Danny, and the doctor gives her similar advice. Soon after, two German spies land on the beach, having been assigned to a secret mission in the area. Rusty, suddenly ignored by Danny, runs away from home and encounters the spies in the woods. Realizing that the dog can provide them with small game, the agents decide to keep him. Danny, meanwhile, begins a desperate search for Rusty. One week later, Hugh reads a newspaper story about farmers hunting an abandoned German Shepherd who has been killing their chickens. Fearing for Rusty's life, Danny organizes his friends to search for the dog. As domestic tensions escalate between Hugh and Ann, Danny combs the countryside for Rusty. Still hiding in the woods, one of the spies takes Rusty rabbit hunting, and when the dog hears Danny calling him, he runs to him. The spy follows, and upon seeing the boy, pulls out his gun and takes aim. To protect Danny, Rusty knocks the man down, enabling Danny to grab the gun. Drawn by the sounds of the struggle, the other spy appears and is about to shoot Danny when the rest of the boys arrive and one of them wounds the German with his slingshot. Minutes later, a group of sailors who have been tailing the agents overtake and arrest them. Running home to tell Hugh and Ann the good news, Danny finds his father despondent because Ann has left him. Guessing that Ann is staying with Louise, Danny goes to Louise's house, apologizes to Ann for his disagreeable behavior and begs her to come home. Embracing Danny as her son, Ann returns to Hugh, after which, the Mitchell family and Rusty, happily reunited, pile into the car for a fishing trip.