English housemaid Gladys Aylward yearns to become a missionary in China, but is turned down by Dr. Robinson, the head of the China Missionary Society. After years of working in the household of Sir Francis Jamison, a friend of the Society, Gladys saves enough money to buy a train ticket to China. Taking pity on Gladys, Sir Francis then offers to contact Jeannie Lawson, an elderly missionary friend who lives in China. At the end of her train journey, Gladys rides muleback to the city of Yang Cheng in a remote province of Northern China. There she is welcomed by Mrs. Lawson, who plans to establish an inn at the mule train crossing and teach the Bible to the passing muleteers in the hopes they will impart the stories to peasants living in the distant mountains. Gladys is regarded as a "foreign devil" by the distrustful villagers, but is equally baffled by their customs. After the inn is finally completed, Mrs. Lawson christens it "The Inn of the Sixth Happiness," and gives Gladys the task of supplying their first guests. When Gladys' attempts frighten the reluctant mule drivers, she turns to Capt. Li Nan, a passing Eurasian solider who speaks English, for help. Li has been sent by the Chinese government to enforce the nation's laws, and of paramount concern to him is the unbinding of young girls' feet. After Li persuades the drivers to frequent the inn, Mrs. Lawson is soon dispensing Bible stories along with bowls of rice. Aided by Mrs. Lawson and Yang, the inn's cook, Gladys begins to grasp the language and customs of the village. Gladys' education is cut short, however, when Mrs. Lawson falls from the top floor of the inn and dies from her injuries. When word comes that the inn is to be closed, Li, who distrusts all missionaries, urges Gladys to return home and asks the Mandarin, the ruler of the district, to ensure her safe passage. The wily Mandarin instead offers Gladys the job of "foot inspector," enforcing the unbinding of young girls' feet, a post no man will accept. When Gladys' first attempt results in the villagers stoning her, an elderly woman volunteers to unbind her own feet. Sensitive to the woman's pain, Gladys protests, and a young mother then presents her little daughter's bound feet to Gladys. As other women follow suit, Gladys' mission is hailed as a success, and she then demands that the Mandarin allow her to spread the word of God as she travels the mountain villages. After Gladys masters Chinese and wins the respect of the people, the Mandarin befriends her and the inn becomes a success. One day, the convicts in the prison riot and the warden orders them shot. When Gladys objects and offers to reason with the prisoners, the Mandarin sends her inside the prison, totally alone. During the rioting, a prisoner raises an ax to strike Gladys, but lowers it when she is recognized as the women who helped their people. Li, a prisoner, tells Gladys that the warden has been stealing their food and that the men are restless and want work. Promising reform, Gladys hurries back to report to the Mandarin and finds him in a meeting with Li, who has been promoted to colonel. Li is astonished to discover that Gladys has remained in the village, and Gladys proudly states that she has become a Chinese citizen. After Gladys convinces the Mandarin to institute prison reforms, Li informs them that war is looming between Japan and China. Li asks Gladys to tell the villagers that they must fight their invaders, but she refuses on the grounds that killing conflicts with her faith. Gladys invites Li to accompany her on a tour of the mountain villages, and when she rescues an abandoned baby girl in one of the villages, Li urges her to turn the infant over to a Chinese family and then bitterly confides that his European father abused and divorced his Chinese mother. Upon returning to the inn, Gladys cheerfully introduces Li to the four other Chinese children she has adopted. Confused about his feelings toward Gladys, Li consults the Mandarin, who, deciding to play matchmaker, sends Gladys a flattering dress and invites her to dinner with Li. Li is smitten with Gladys, but the evening is interrupted when news comes that war has started and that Japanese troops are amassing at the border. Before reporting for duty, Li confesses to Gladys that he has fallen in love with her. Soon after, Japanese planes bomb the city, and the Mandarin announces that Japanese troops are near and orders the villagers to seek refuge in the mountains. When Gladys discovers that Yang has been injured in the attack and is unable to move, she insists on remaining behind with him and sends the children with Li. After Yang dies, Gladys escapes, and once the invaders depart, Li returns to the inn. Finding the building deserted and in shambles, Li fears that Gladys is dead until she suddenly appears and they embrace. Forecasting defeat, Li orders the Mandarin and his council of elders to flee to the provinces in the south. When Gladys refuses to leave her people, Li promises to love her as long as he lives, and then rides off to battle. At the final meeting of the elders, the Mandarin pays tribute to Gladys and converts to Christianity in her honor. Gladys is overcome with tears as the Mandarin bids her farewell. As Japanese warplanes strafe the city, Gladys prays for the safety of the children. One day, a band of ragged orphans arrive with news that Dr. Robinson has set up a mission in Sian and has arranged for a train to take the orphans to safety. Upon hearing that Gladys intends to lead her children to Sian, Li warns her that the Japanese have set up a roadblock on the main road. Convinced that her purpose in life is to save the children, Gladys decides to brave the treacherous mountain trails in order to reach Sian in time. Before embarking on her perilous journey, she promises Li she will return to him, and he slips his ring on her finger, but Li is later killed while trying to decoy some Japanese troops. After weeks of hardships, Gladys and the children cross the final mountain range in their path to Sian. On the day that the train is to leave, Robinson anxiously awaits the arrival of the orphans. At the last minute, Gladys leads the children into town to the cheers of the people. She then reintroduces herself to Robinson, who regretfully recalls the day he judged her unfit to be a missionary. When Robinson invites her to join him and the children, she replies that she is going home to North China.