Elwood P. Dowd is an affable man who claims to have an unseen (and presumably imaginary) friend Harvey Ð whom Elwood describes as a six foot, three-and-one-half inch (192 cm) tall pooka resembling an anthropomorphic rabbit. Elwood introduces Harvey to everyone he meets. His social-climbing sister, Veta Simmons, increasingly finds his eccentric behavior embarrassing. She decides to have him committed to a sanitarium. When they arrive at the sanitarium, a comedy of errors ensues. When Veta confesses that she has seen Harvey too, the young Dr. Sanderson commits Veta instead of Elwood. But when the mistake comes out, the search is on for Elwood and his invisible companion.
When Elwood shows up at the sanitarium looking for his lost friend Harvey, it seems that the mild-mannered Elwood has had a strange influence on the staff, including sanitarium director Dr. Chumley. Only just before Elwood is to be given an injection that will make him into a “perfectly normal human being, and you know what bastards they are!” (in the words of a taxi driver who has become involved in the proceedings) does Veta realize that she would rather have Elwood the same as he has always been Ð carefree and kind Ð even if it means living with Harvey.