Elwood P. Dowd is an affable man who claims to have an unseen (and presumably imaginary) friend Harvey — whom Elwood describes as a six-foot, three-and-one-half-inch tall pooka resembling an anthropomorphic rabbit. Elwood introduces Harvey to everyone he meets. His social-climbing brother, Vernon, increasingly finds his eccentric behavior embarrassing. He decides to have him committed to a sanitarium. When they arrive at the sanitarium, a comedy of errors ensues. The young Dr. Sanderson mistakenly commits Vernon instead of Elwood, but when the truth 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's delusion 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 Jerks they are!" (in the words of a taxi cab driver who has become involved in the proceedings) does Vernon realize that he would rather have Elwood the same as he has always been — carefree and kind — even if it means living with Harvey. But the only reason Vernon hears from the cab driver is that he can't find his money purse and has to get the money from Elwood. That is when the cab driver sees what is happening and goes into his spiel. Later Vernon realizes that his money purse was there all along, but Harvey hid it from him. He winds up believing in Harvey, too.