Brad Braden is the no-nonsense general manager of what was at the time the world's largest railroad circus. He has a number of problems on his hands for the upcoming season.

The show's board of directors plan to run a short 10 week season rather than risk losing $25,000 a day in a shaky post-war economy. Brad bargains to keep the circus on the road as long as it is making a profit, thus keeping the 1,400 performers and roustabouts who make Ringling Bros. and Barnum & Bailey Circus' the Greatest Show On Earth working.

Brad's first problem is having to tell his girlfriend, Holly, a flyer who has no idea with whom she is in love with and who had been expecting to be the star of that season's show, that she's out of the center ring. The only way he was able to get management to agree to a full season was to hire The Great Sebastian, "the debonaire King of the Air" and world-class trapeze artist, as the star of the show. Holly knows Brad must think of the show first and personal feelings second, and that he does not take chances with the show, but is nevertheless infuriated at his decision.

His second problem is keeping Sebastian under control. He has a well-deserved reputation as a ladies' man who has cut a wide swath through the female contingent of every show he's ever worked in, to the detriment of the shows' operations.

His third problem is keeping an eye on Harry, a midway concessionaire he suspects of running crooked games of chance, who works for a mysterious gangster named Mr. Henderson (who has a healthy respect for Brad Braden and not much for Harry).

Another situation unbeknownst to Brad involves the beloved Buttons the Clown, who is never seen without his makeup. During a performance, Buttons converses with a woman member of the audience — who warns him that an unnamed "they" are asking questions about him again. She is in fact his mother and they see each other only once a year. Hints about his former life are revealed as he gives first aid to performers and wraps bandages around a trapeze for Holly in an expert manner. Holly later finds a newspaper article about a doctor who had "mercy killed" his wife.

The competition between Holly and Sebastian for the center ring develops into a romantic triangle as well, with both Sebastian and Brad vying for Holly as the aerialists' acts become increasingly daring and dangerous. Sebastian ignores his former lovers on the show: Angel, who performs in the elephant act; and Phyllis, who does a double turn as an iron jaw artist and a vocalist starring in a South Seas spectacular built around her talent as a singer. The duel ends when, in response to a challenge from Holly, Sebastian removes his safety net and suffers serious injuries in a fall when a trick goes wrong. Buttons tends to him, and when a doctor expresses admiration for the way he dealt with the injuries the clown explains, a little nervously, that he used to be a pharmacist's mate. Holly finally has the center ring and star billing — but not the way she wanted it. Brad is unable to comfort her because she is in love with Sebastian.

One problem at least is resolved. When Harry is caught cheating circus attendees on the midway, Brad calls him on it and fires him, finishing the fight Harry started by throwing him into a puddle of mud. Harry leaves the lot, vowing revenge. He is seen now and then on the periphery of the show, shooting craps and sowing disaffection, particularly with Klaus the elephant trainer who is obsessed with Angel, one of the "ballet girls" (female performers whose primary job is to look beautiful, as opposed to performing a specialty act) who works with his elephants as "the Sultan's Favorite."

Sebastian rejoins the show, but is unable to return to the trapeze due to an injury which has left him with a useless right arm. A guilt-ridden Holly professes her love for her former rival over the cold, unfeeling Brad. Calling Holly a fool "for busting up the swellest guy in the circus," Angel makes a pass at Brad and they become an item. This sits badly with Klaus, who has spent the entire season pursuing Angel and cannot accept that she is not in love with him and does not want him.

As they are about to leave one stand, Special Agent Gregory of the FBI intercepts Brad, asking if the circus doctor looked like a photograph of a man he is hunting (the photo is of Buttons without makeup). Having never seen Buttons without makeup, Brad doesn't recognize the man in the photo. The detective boards the train to continue his investigation. Brad mentions this to Buttons, who tells him that Sebastian has feeling in his injured hand — a sign that his disability is not permanent. Brad makes the connection between Buttons and the fugitive doctor and comments that the police will be taking fingerprints. The implication is that Buttons should make himself scarce until the detective leaves the show to search elsewhere.

The joy of Sebastian's potential recovery is overshadowed by a spectacular collision of the circus' two trains, set up by Harry, the crooked midway operator fired by Brad, and Angel's rejected suitor, Klaus, as a byproduct of their robbing the circus pay wagon of the money earned by the show at the last stand. Buttons, who had been about to flee, returns after a plea from Holly, who, like Brad, had made the connection between the doctor "who killed the wife he loved, then vanished" and his new identity as Buttons the Clown, and saves the critically injured Brad's life by giving him a blood transfusion from Sebastian "on the fly," despite knowing that Gregory is watching. This in turn leads to Gregory reluctantly arresting Buttons, who he declares "is all right."

Holly realizes that she is actually in love with Brad, that she has always loved him; and takes command of the show, mounting a circus parade through the town nearest the crash and staging an open air show by the crash site (as the Big Top and lighting were lost in the wreck). Brad's near-death experience forces him to admit that he is in love with Holly, but ironically she now hasn't time for him because the show must go on. The last loose end is tied up when Sebastian proposes to Angel and she accepts. The movie ends with the troupe mounting a "spec" to open their improvised performance, which will keep the show in the black and enable them to continue their tour, a magnificent recovery from disaster.

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