In the sleepy English village of Melcombe on the eve of WWI, pacifist John Armstrong owns a flourishing drapery store. His apprentice, Peggy Matthews, is having an affair with his German assistant, Otto Liebemann. Otto's activities arouse the suspicions of Lieutenant Baring, who visits Armstrong to express his concern. The fiery and stubborn Armstrong insists his employee is completely trustworthy.

Soon afterwards, Armstrong receives an invitation to visit Baring at his home, Fanshawe Hall. Baring tells Armstrong that war with Germany is inevitable. Armstrong refuses to believe this but quickly becomes smitten with Baring's cousin, Betty Mortimer. Betty tells Armstrong that when the war starts she intends to turn Fanshawe Hall into a hospital for wounded soldiers.

After the August 1914 bank holiday, Otto does not return to work. He leaves a note for Armstrong declaring his true allegiance - to Germany. When Peggy sees this she breaks down; she is pregnant with Otto's child. Peggy's stepmother disowns her, but the more compassionate Betty overhears the conversation and says that she will look after Peggy.

The war commences and badly wounded soldiers begin arriving at Fanshawe Hall. Armstrong is more interested in his business than in fighting, but his interest in Betty prompts him to visit her and give the hospital a charitable donation. He tentatively begins to tell Betty how he feels about her but she takes him up to the ward and shows him the beds full of wounded men. Betty tells Armstrong that she is devoted to her work. Feeling ashamed of himself, he leaves.

Armstrong eventually decides to enlist and joins his regiment at camp. He writes to Betty, telling her he is lonely. She expresses her affection for him but also tells him that he will soon find plenty of friends amongst his new comrades. Armstrong quickly befriends another soldier, Ginger Dickens, and the two men discuss their fear of the future. Their regiment leaves for France and Betty comes to say goodbye. She and Armstrong embrace.

While Armstrong and Ginger fight in the trenches, Betty is kept busy tending her patients and Peggy, who loses her baby. When she recovers from her loss, she decides to become a nurse and help the war effort at Fanshawe Hall. After some time, Armstrong returns home on leave. He goes to see Betty, but witnesses her passing her locket to Baring. Convinced that she loves Baring instead of him, Armstrong unhappily walks away. Ginger, also on leave, decides to visit his friend in Melcombe. While out for a walk, he sees Peggy being accosted by a civilian man, and rescues her from his unwanted attentions. Peggy and Ginger soon begin to fall in love, but before she can tell him about her past, he and Armstrong are recalled to the Front. On the battlefield, Otto brutally attacks Lieutenant Baring. Ginger kills Otto and is shocked to find a photo of Peggy in the dead man's pocket. As Armstrong attempts to move the injured Baring he finds Betty's locket. He momentarily considers leaving his perceived rival to die before dragging Baring to safety. As Armstrong does this, a bomb explodes nearby and blinds him.

Time passes and Armstrong is taken to Fanshawe Hall to be nursed by Betty. After the Armistice, Ginger visits him. Ginger is angry with Peggy and refuses to talk to her. Baring tells Armstrong that Betty gave him her locket to pass on to Armstrong, but he forgot to do so. Although Armstrong now realises that Betty does not love Baring, he decides he cannot tie her to a blind man. Betty, meanwhile, does not understand why Armstrong won't tell her that he loves her. Peggy tries to convince Armstrong to speak to Betty. He refuses, but forces a reconciliation between her and Ginger.

As normality returns to everyday life, Armstrong wonders what to do with his future. He finds out about the Comrades Clubs formed by ex-soldiers and a few months later opens a branch in Melcombe. The now-married Peggy and Ginger attend the grand opening, as does Betty, who decides to propose to Armstrong. They get married and some time later Armstrong undergoes an operation that will restore his eyesight.