Upon arriving at Millford Farms in Kentucky, Irish horse trainer Shawn O'Hara and his niece Margaret, who is studying to be a nurse, are greeted by Thomas Millford and his other trainer, George Carson. Millford has hired Shawn because of his reputation for judging the potential of racehorses early in their development. Shawn left Ireland after the death of his nephew, Margaret's brother, during a steeplechase race made him reluctant to train jumping horses. One night, when Margaret is home from nursing school, Shawn shows her a trick for appraising a horse: He holds out a carrot to a group of yearlings and looks for the first one to claim the reward. This night, as on several previous occasions, the winner is an unprepossessing horse named Seabiscuit. Later, when Shawn, Carson and Millford cull the yearlings, Shawn begs Millford to keep Seabiscuit, but on Carson's advice, Millford turns him down. Meanwhile Millford's jockey, Ted Knowles, flirts with Margaret, but she has determined never to fall in love with a jockey and rebuffs his advances. Ted asks Shawn to intervene on his behalf, and Shawn agrees, provided Ted will buy Seabiscuit. When Ted approaches Millford with an offer, however, Millford suspects that Shawn is behind it and agrees to keep the horse for his stubborn employee. Despite Shawn's faith in Seabiscuit, his initial performance is poor. Shawn tries many tricks to increase the horse's speed, but finally Millford refuses to spend more time on the horse. After Shawn takes ill, Margaret takes him to California. Shawn convinces racehorse owner Charles S. Howard and his wife to buy Seabiscuit from Millford. He also persuades the Howards to buy Ted's contract. Using a new training method, Shawn finally makes Seabiscuit a winner. After Ted is injured in a race at Santa Anita, Shawn arranges for Margaret to be his nurse. Margaret admits that she returns Ted's love and agrees to marry him if he will give up racing. While Ted is recuperating, jockey George Woolf rides Seabiscuit in more winning races. Disaster strikes, however, when the horse develops a career-ending problem in one leg. At the request of Mrs. Howard, Shawn agrees to attempt to cure Seabiscuit, and against all odds, he succeeds. Shawn offers Ted a position as his assistant, and Ted accepts so that he can marry Margaret; however, when George is unavailable to ride a recovered Seabiscuit, Ted takes over. Furious, Margaret breaks her engagement. Ted then tells her that he is willing to leave racing, but that he wants to leave as a winner. Now that she understands, Margaret relents, and Seabiscuit wins the Santa Anita Handicap on 2 March 1940, establishing a new track record. A statue of Seabiscuit is later erected at the track, and Ted leaves racing to marry Margaret and become a trainer.