On a sun-kissed, early 20th Century morning in the farming heartlands of America, a shy but handsome cowhand, Curly, turns up at Aunt Eller's ranch to ask her niece Laurey to a social dance. He promises to take her there in style (a surrey with a fringe on top) but she plays hard to get. They tease each other. Attracted though she is to Curly, she capriciously agrees to go instead with Jud, a rough hired hand whose sullen temper scares her. So she wonders if she's made the right decision.
Meanwhile, there's another girl faced with a choice of suitors, Ado Annie. One of them is Will, who was promised her hand in marriage if he had $50 to his name. The other is a pedlar, Ali Hakim, who prefers flirtation to commitment and would be only too pleased if Will set him free by claiming Annie's hand.
The disappointed Curly goes to have it out with Jud. A fight is narrowly averted. Ali Hakim takes the opportunity to sell some of his pedlar's merchandise, persuading Laurey to buy what he calls an ancient remedy to clear the mind although it's really nothing more than smelling salts. Under their influence she dreams that Jud kills Curly and abducts her. Fakery or not, her mind is clearing.
It's the night of the social, bringing farmers and cowhands together in uneasy friendship. Will has raised the $50 needed to secure Ado Annie's hand but, stupidly, spent it on presents for her. Ali Hakim sees his chance of freedom and buys the presents off Will to get him back in credit - taking everything except a risqué toy, the 'Little Wonder', which (unknown to Will) incorporates a lethal booby-trap. Jud buys the toy instead.
The social is now under way with a box-auction, at which the men bid for hampers made by the girls and get the girls' company as part of the deal. The foolish Will bids his just-recovered $50 for Annie's box, and is only saved from losing his money yet again by a bid for $51 by Ali. Curly and Jud enter a bidding war for Laurey's box, which Curly wins by selling all his possessions. In revenge Jud tries to get him to use the booby-trapped 'Little Wonder', but fails.
Eventually the two girls settle on the men they want, and make the right choices: Laurey rejects the brutal Jud in favour of Curly, while Annie (somewhat reluctantly) says goodbye to Ali in favour of Will. Their lives seem sorted. But not quite.
A few weeks later it's Laurey and Curly's wedding day: the start of a new life in a new state, because Oklahoma has just been incorporated into the USA. Amid the optimism and good-natured banter, Jud turns up, attacking Curly with a knife.
During the brawl that follows Jud gets accidentally killed and Curly is obliged to hand himself over to justice, wedding day or no. But Aunt Eller leans on the lawyers present to dispense justice on the spot and find him Not Guilty. Thanks to which Curly and Laurey can ride off into their joint future, on a fine day very like the one that launched the story, in a surrey with a fringe on top.