The story opens with a great wind sweeping into Beacon House, a desolate boarding-house in London, bringing with it an enormous, exuberant man named Innocent Smith. Smith leaps garden walls, climbs trees, and turns the lives of the listless residents upside down with his frantic energy and childlike innocence. Among the residents are Arthur Inglewood, a shy photographer; Michael Moon, a cynical journalist; Rosamund Hunt, a wealthy and spirited heiress; and Diana Duke, the practical niece who runs the house.
As Smith settles in, he begins behaving in ways that alarm some of the more conventional observers, particularly Dr. Herbert Warner, a pompous scientist. Soon, accusations accumulate against Smith, ranging from attempted murder and burglary to desertion and bigamy. Witnesses and documents arrive from all over the world, detailing Smith's bizarre past, including a shooting incident at Cambridge, a break-in at a high-end London house, and various mysterious wives left in his wake.
A mock trial is convened in the boarding-house, presided over by the eccentric Court of Beacon. Throughout the trial, Michael Moon and Arthur Inglewood defend Smith, slowly unravelling the meaning behind his bizarre actions. It becomes clear that Smith is not a criminal or a madman, but a radical optimist who uses practical jokes and shocking stunts to remind people that they are alive. His seeming crimes are actually elaborate allegories designed to cure pessimism and rekindle wonder in a weary world.
The climax reveals the truth about Smith's marital history: he has only ever had one wife, Mary Gray, whom he married after nearly drowning her in a canoe. His method of leaving her in various places and periodically eloping with her anew is a deliberate strategy to keep the romance and peril of love alive. Ultimately, the accusations collapse under the weight of his joyful philosophy, and Smith departs into the sunset with his wife, leaving the residents permanently transformed by his infectious sanity.