Captain Lilly runs a steamboat on the Mississippi River with the help of his son States. Along their route is a shantytown made up of houseboats, whose inhabitants often feud with the steamboat owners. After a shooting match between States and shanty-boater Chicken Sam, Sam reveals to States his true heritage: Captain Lilly killed his father and adopted States, who is a born shanty-boater. States confirms this fact with court records, and after leaving Lilly, becomes a boarder on Aunt Vergie's houseboat. Vergie's daughter Towhead falls in love with States and, recognizing that he is homesick, goes to Lilly's boat and steals his dog, Shoo-Fly. States tries to get the dog to return to Lilly, but he remains faithful to him. When Lilly comes to ask States to come back, he sees Shoo-Fly and believing that States stole him, denounces him. States builds his own shanty-boat with a breakwater protecting it, but one day, Lilly smashes it with his boat because he thinks it is creating a bar in the river. Unknown to Lilly, Towhead is in the boat trying to decorate, and is injured during the crash. States plans to marry Towhead, but Lilly has him institutionalized in a reform school when he hears the news. States is freed by some of his friends and then borrows a gun, with the intention of killing Lilly. In the meantime, the river has begun to flood, and people from the nearby town have been trying to burn the shantytown. The shanty-boaters release their boats from their moorings, and States dives into the river and swims for Vergie's boat. Lilly follows with his boat, casting a searchlight across the river. States finds Vergie and Towhead on their boat, boards up the windows, and stays with them. Lilly sees the shantyboat headed for a break in a levee and, realizing that it will be destroyed, saves the boat just before it reaches the break, thereby saving the lives of Vergie, Towhead and States. Lilly continues to help other shanty-boaters, his former rivals, and by morning, States is back in the pilot house with Towhead by his side.