In the early 1900s, pompous New York banker Jasper Cawthorne fires Miss Preble, a dressmaker, when he learns that she makes clothes for "show people," as well as for his wife Abigail, his daughter Libby and his niece Patience. Intrigued by the forbidden, Libby and Patience sneak into the Majestic Theatre, where Libby attracts the attention of a vaudeville magician, Steve "Slim" Gogarty. The two quickly fall in love, and when Libby overhears her father's plans to have the police raid the vaudeville theater, she places herself in a compromising position in Steve's dressing room. Finding his daughter there, Japser demands that the two marry immediately. Later, the now married Libby is dangerously near death after the birth of a daughter Sheila, and Steve prays aloud that if someone must die, he be taken in her place. The Angel of Death hears Steve's pleas and takes him instead. After serving an eighteen-year probation period, Steve is allowed to return to Earth for seven days as a ghost, in order to help his wife and daughter overcome the dominance of Jasper and prove that he did not leave Libby for another woman. After livening up Jasper's stuffy party with his magic flute, Steve takes Sheila, the only person who can see and hear him, to the Majestic. There, she sees meets and falls in love with Martin Wilde, Jr., the son of the theater's owner and Steve's best friend. Seeing the two dancing together, Martin, Sr. offers Sheila a job in his show, which she accepts with her mother's blessings. Learning this, Jasper tries to send Sheila to a private girls' school, but Libby stands up to her father and insists that Sheila be "allowed to live her own life." Jasper then buys the demand note on Martin's theater, but agrees not to insist on immediate payment if Sheila is fired. Steve uses his magic flute to return Jasper and Martin, Sr. to child-like states. Libby collapses during the ensuing family argument and is ordered to go to Florida for her health. When Jasper makes good on his threat to close the theater, Abigail secretly gives Martin the money to reopen it. Jasper then arrives at the theater on opening night with a court order to remove Sheila from the state, only to be told off backstage by his wife, niece and even his servants. Having a change of heart, Jasper then agrees to co-finance the show with Abigail. As the engaged Sheila and Martin, Jr. perform their final number of the show, Jasper receives a telegram, informing him that Libby has died, and her spirit joins Steve in the balcony. The two watch the show end, then ascend to Heaven.