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Cedric "Ceddie" Errol lives with his mother in poor circumstances in New York. The bright child is popular everywhere he goes. The boy's best friends are the shopkeeper Mr. Hobbs and the shoeshine boy Dick. One day, Ceddie receives the news that he is to move in with his grandfather in faraway England. The old Earl of Dorincourt, the father of Ceddie's deceased father, needs an heir and wants to take the boy to his castle. Ceddie is to grow up there as Lord Fauntleroy - but without his mother, as the earl has never got over the fact that his son married an American woman. Despite this downer, Ceddie arrives in England full of anticipation and performs a minor miracle. In no time at all, the little lord manages to turn the bitter old man into a philanthropist and lovable grandfather.