Dick Whittington is on his way to London to make his fortune. Meanwhile, in the City, Alderman Fitzwarren is looking for a crew for a ship bound for Morocco - carrying poison to rid the Sultan's palace of rats. He gives Captain Birdtable the task of recruitment. London too is plagued by rats. Their leader, Queen Rat, aims to take over the world.
Dick arrives in London exhausted and wishing for a friend. Whiles asleep, Fairy Bow Bells grants his wish, giving Dick Tommy the Cat to look after him. Together they arrive at Alderman Fitzwarren's shop where Dick meets Sarah, Jack, Alice and the Alderman. They agree that Dick and Tommy will be Chief Rat Catchers.
Dick is entrusted with the keys to the shop safe. It contains a diamond necklace and the day's takings. He puts the key in a sweet jar on the top shelf and falls asleep. Queen Rat has been spying on him and using a cunning plan she ensures that the jewels and money are found in Dick's bundle. Dick is banished from London.
Alice hears Queen Rat boasting of her success and she realises Dick is innocent. With the Fairy's help, he returns to London where preparations are being made to set sail. Sarah discovers Dick hiding and realising his innocence she suggests he stows away on the boat. Unfortunately, Queen Rat and her ratlings also climb aboard. On the ship, Alice and Dick are reunited and Alice tells her father of Dick's innocence.
Queen Rat, intent on Dick's death, creates a storm. The ship sinks but with the help of the Fairy, the crew are washed up on the shores of Morocco. They are taken prisoner by the Sultan, but Dick promises to rid the palace of rats in return for his friend's freedom. He fights with the Queen Rat and wins. The Rat repents and Alice and Dick live happily ever after!