1830s England. A young boy, Tom Brown, prepares to go to his new school. His father, Squire Brown, advises him and gives him his first purse of money. Tom leaves for Rugby school by stagecoach.

At school, Tom excels in his first game of rugby, but emerges battered and bruised. New friend Harry East takes Tom under his wing. After the match, Tom and East use Tom's money to buy strings of sausages, which they roast.

At the Brown's family home in Berkshire, a man secretly meets Tom's sister, Cynthia. She elopes with him, but her father gives chase on horseback. The lovers race to a clergyman, who marries them. Squire Brown arrives, but is too late to take Cynthia back. He says he never wants to see her again.

That evening at Rugby, the younger boys hide from an older group led by school bully Flashman. He picks on Tom since the others are hiding under their beds. Tom is 'tossed' in a blanket. Diggs, 'the Mucker', encourages Tom and East to stand up to Flashman's bullying, and acts as referee in a fight between them, which Tom and East win. Meanwhile Elsa, Dr Arnold's daughter, has had a note from Tom and has fallen for him. She comforts him after the fight, mopping the blood from his head.

Term is ending. Tom and East hide behind a teacher's unattended desk, but are caught when they let a paper ball roll out. Elsa leaves Tom a note asking if he wishes to say goodbye. He shakes her hand bashfully, before returning home.

Ten years later. Cynthia Brown is struggling as a governess to support her son. Her husband died one year after their marriage. Her employers are going abroad and must dismiss her. Tom misses his sister and wishes to take a memento of her, now he is leaving for his last year of school. He tries to take a tail, which she won hunting. The Squire forbids this, but later relents, placing it in Tom's case without his knowledge.

Dr Arnold, the headmaster, is advised he should split up Tom and East, replacing East with a young boy for whom Tom can act as guardian. Tom is introduced to Arthur, a timid new boy. Dr Arnold invites them to tea. Arthur is assigned to Tom's new study and so East is split up from Tom. When Arthur kneels to say prayers on his first night in the dormitory, Tom prevents him from being bullied, kneeling down to pray with him.

Martin, the eccentric philosopher, entertains Arthur. Tom finds the tail belonging to Cynthia that was put in his case. An experiment in Martin's room results in an explosion. In his haste to fetch help, Arthur bumps into Slogger Williams. Elsa is upset when she finds Cynthia's tail in Tom's room, not knowing about his sister.

Arthur avoids a beating from Slogger when Tom decides to fight Slogger himself. Many boys gather to watch their fight, but a teacher eventually breaks it up. Afterwards, Arthur goes to Slogger, admitting he was the cause of all this trouble. He tells Slogger to thrash him if he wishes, but wants him to shake hands with Tom and make peace. Slogger goes to Tom's study and the pair shake hands.

A knock at the door causes the roomful of boys to hide as they think it is Dr Arnold. Tom finds Elsa at the door. Unaware of the hidden boys listening, she reveals she has kept a bloodstained souvenir since Tom's fight with Flashman. Tom explains that Cynthia is not his girlfriend but his sister. A table moves and the hiding boys are revealed.

As school breaks up for Christmas, Arthur's mother waits for him in the great hall. Tom realises she is his sister when they are introduced. It is the greatest gift he could hope for. They all return home together, but Arthur and Tom enter first. Tom asks Old Benjy to keep Arthur outside while Cynthia is reunited with her family. Squire Brown still refuses to talk to her, but then the pair are left alone and make up. Christmas carols proclaim the approach of morning.