After Elwood ruins a party Veta and Myrtle Mae had arranged in secret, Veta finally tries to have him committed to a local sanatorium. In exasperation she admits to the attending psychiatrist, Dr. Lyman Sanderson, that she sees Harvey every once in a while herself. Mistaking Veta as the real mental case, Sanderson has Elwood released and Veta locked up. Dr. Chumley, head of the sanatorium, discovers the mistake and realizes he must bring Elwood back, searching the town with orderly Marvin Wilson. With Veta's help, Chumley eventually tracks Elwood to his favorite bar, "Charlie's", and decides to confront him alone.