In the English coastal village of Sewels in Sussex, twelve-year-old Velvet Brown and her older sisters, Edwina and Malvolia, happily finish their last day of school before summer vacation. While walking home, Velvet meets young drifter Mi Taylor and strikes up a conversation with him. As the horse-crazy girl is talking to Mi, she sees a beautiful, rambunctious gelding being chased by its owner, farmer Ede, and is awestruck. When Ede then questions Mi about his business in Sewels in Sussex, Velvet, who is impressed by Mi's knowledge of horses, insists that he has been invited to dine with her family. That evening at dinner, Mrs. Brown asks Mi, whom she has never before met, about an address book with her name written in it, and he reveals that it belonged to his now-deceased father. Although Mrs. Brown is deliberately secretive about her relationship with Mi's father, she does invite Mi to spend the night in the stable. Velvet then tries in vain to convince her father Herbert, a butcher who prides himself on his thrift and self-control, to hire Mi as a delivery boy. When he and his wife discuss the matter later, however, the wise, persuasive Mrs. Brown easily changes his mind. Later, Velvet confesses to her mother that she has "fallen in love" with The Pie and asks her about Mi's father. Mrs. Brown, a former swimmer, reveals that when she was twenty, Mi's father was her devoted trainer and inspired her to swim the English Channel, a feat never before accomplished by a woman. Mrs. Brown adds that she declined to tell the obviously embittered Mi about his father because she felt that it was not the proper time to do so. Unaware that he has just stolen all of her mother's savings from the kitchen, Velvet rushes to tell Mi the news about his new job and home. Mi covers up his theft and accepts the job, then, chagrined, sneaks back to the kitchen to return the money. Later, Velvet coaxes Mi into taking her on a delivery to farmer Ede's, and on the way, Mi states that he was once thrown by a horse and now hates them. As they are watching The Pie in the field, the horse jumps Ede's wall and dashes off toward town. After estimating the length of the horse's jump, the astounded Mi mutters that The Pie could jump "Beecher's Brook." The Pie's subsequent rampage through the village leads Ede to decide to raffle off the horse. Mr. Brown at first refuses to allow Velvet to participate in the raffle, but when Mi proudly announces that he has bought tickets for all of the children, Mr. Brown relents. Although Velvet confidently proclaims that her number, 62, is going to be selected, another number is drawn, and Velvet collapses with disappointment. Later, however, Velvet learns that when the winning number was not claimed, a second number, 62, was drawn, and she is awarded The Pie. Velvet then asks Mi about "Beecher's Brook" and he reluctantly reveals that it is a difficult jump at the Grand National Steeplechase course. Velvet spends her first day with The Pie racing through the countryside, but her joy is cut short when her father insists that the horse earn his keep by pulling the delivery cart. As soon as he is hitched, however, The Pie bolts and destroys the cart, causing Mr. Brown to denounce Mi as a meddler. Later, Velvet reveals to Mi that she wrote away to the Aintree race course for entrance papers to the Grand National Steeplechase. Although Mi tries to discourage her, Velvet asks her mother for permission to enter the race, which includes a 100-pound entrance fee. After Mi admits that The Pie is good enough to win, Mrs. Brown gives Velvet the 100 pounds she earned for her Channel swim, which she has been saving in anticipation of a "breath-taking piece of folly" like The Pie. Mrs. Brown and Velvet then entrust Mi to deliver the money to Aintree, and although he is tempted to abscond with it while in London, Mi carries out his assignment, impressing even Mr. Brown. When Mi tells Velvet that he was unable to find a jockey or a trainer in London, she persuades him to train the horse by promising him one-half of any Grand National winnings. Over the next several months, Velvet and Mi, a former jockey, rigorously train The Pie. During the winter, The Pie becomes seriously ill, and the entire Brown family worries as Mi struggles to save him. The Pie survives, and come spring, Velvet and Mi leave for Aintree. There they meet with Ivan Taski, a Latvian jockey whom Mi hired through the mail. Taski's lackluster attitude toward the race convinces both Velvet and Mi that they cannot win with him, and on the eve of the contest, they find themselves with no jockey. Velvet then tries to convince Mi to ride The Pie, but he tearfully refuses, explaining that during a race in Manchester, he pushed his horse too hard and caused a collision that resulted in the death of another jockey. Later, however, when Mi is alone with The Pie, he realizes he must challenge his fears in order to make Velvet's dream come true. After riding The Pie around the track, Mi rushes to tell Velvet that he wants to race, but discovers that she has donned jockey clothes and is determined to ride the race herself. Although Mi tells her that she will be disqualified, Velvet insists that Mi cut her hair and help her with her impersonation. Claiming not to speak English, Velvet convinces the officials that she is Taski and undertakes the arduous race, with The Pie at one-hundred-to-one odds. As horse after horse drops out, Velvet steadily gains ground and wins the race, cheered on by a joyful Mi. Just after finishing, however, Velvet collapses from exhaustion, and the track doctor soon discovers her true sex. As predicted, The Pie is disqualified, but Velvet is nonetheless heralded as a hero throughout England and earns the nickname "National Velvet." Later, back in Sewels in Sussex, Velvet is besieged by lucrative job offers, including one from a Hollywood film studio. Velvet is tempted by the offer until she learns that the studio also wants The Pie. Fearing that The Pie would be made into a sideshow, Velvet tells her father she is not interested. Mr. Brown is angered by Velvet's decision until Mrs. Brown explains that Velvet knows intuitively that her time in the limelight must be brief and dignified. Soon after, as Mi is packing to go, Mr. Brown admits that he always mistrusted him, but is now proud to have known him. Mi leaves the Brown home without saying goodbye, but a grateful Velvet races after him, sure that the proper time has come to tell him about his father.