Former U.S. Attorney General Homer S. Cummings and James V. Bennett, Director of the Federal Bureau of Prisons, relate the story of Clyde "Reno" Madigan and his gang to illustrate the rehabilitative potential of the prison system. Reno, a hardened, unregenerate criminal, heads a gang composed of George "Bugs" Jacklin, a soft-hearted and soft-headed thief; Albert "Groper" Crane, a psychotic gunman who suffers from delusions that women are hiding in his pocket; and Kitty Carson, Reno's moll. While casing a job in Birmingham one day, Kitty meets Joe Z. Cameron, a penniless drifter embittered by his treatment by the police, and she recruits him to drive the getaway car. After a daring hold-up of the bank, the gang takes refuge in an auto camp, while Reno and Joe bury the loot. Returning from their chore, Reno and Joe become embroiled in a shootout with the police, in which Kitty is wounded. Joe insists upon rescuing the wounded Kitty, and after leaving her with an old friend, the gang drives off. They are soon apprehended at the Alabama state line, however, and are sentenced to prison in Atlanta. In Atlanta, Reno tells Joe that he will split the bank loot with him upon their release. Meanwhile, Kitty, who has been turned in by her doctor, is sentenced to a women's prison, where she begins to learn the trade of a beautician. In Atlanta, prison authorities attempt to plot the rest of the gang's rehabilitation. They decide that Bugs's reformation lies in being united with his estranged wife and child. Joe, who has no criminal record, is sent to the Chillicothe, Ohio Industrial Reformatory, a prison for first offenders, where his injured arm is repaired and he is taught the trade of welding. Groper, suffering from persecution mania, is transferred to the Hospital for Defective Delinquents, where he is treated with occupational therapy. From their respective prisons, Kitty and Joe begin to correspond with each other, and Kitty is later paroled to work in a Cincinnati beauty shop. Reno is the only member of the gang that remains unregenerate, and is sentenced to Alcatraz after an attempted prison break. Before he leaves, he instructs his cellmate, Vonnie, to recover the money from Joe. After his release from jail, Vonnie visits Kitty and discovers that Joe is working for a welding company in Cleveland and forces Kitty to accompany him there. When Vonnie orders Joe at gunpoint to open his employer's safe, Joe attacks Vonnie with his blow torch and disables him. Kitty, fearing that she will be arrested for breaking her parole, tries to flee, but when the police arrive, they arrest Vonnie and praise the rehabilitation of Joe and Kitty, who decide to serve out the rest of their probation together in Cleveland.