Dust storms and drought make herding horses a tough job for the boys. When the new owner of the ranch, Lydia Phelps, shows up, the ranch is in dire financial straits. The Martin Ranch has the contract to sell horses to the army. Some of the men are working for Martin to make sure that the Circle H will not have enough horses to even submit a bid to the army.
Stony Brooke, Tucson Smith and Lullaby Johnson, the Three Mesquiteers, are working on a horse ranch that is facing failure because the stock has been decimated by drought and windstorms. The government cavalry contract is the only thing that stands between the ranch and disaster, and Henry Martin, a rival rancher, hires Fisher and Dixon to make sure that the ranch loses the contract. Hired as ranch hands, Fisher and Dixon foment unrest among the unpaid cowhands and begin to sabotage their saddles with acid. The situation is complicated by the arrival of Lydia "Granny" Phelps, the penniless yet kindly old lady who has just inherited the ranch, and by the Mesquiteers, who, knowing that the failure of the ranch will send Granny back to the old ladies' home, try to shield her from the grim truth. After a herd of newly captured mustangs stampedes, Stony accuses Dixon and Fisher of spooking the horses and working for Martin, and fires them. Soon afterward, Cameron, the ranch foreman, finds Dixon and Fisher drugging the horses and is killed by Dixon, who makes it look like a wild stallion trampled him to death. Cameron's death prompts Granny to decide to sell the ranch to Martin. At the same time, Stony discovers that the watering trough in the corral has been drugged. Suspecting Martin, Stony rides to confront the rancher, but in the ensuing fight, the sheriff arrives and arrests and jails the Mesquiteers, thus eliminating them from competing in the horse race that will decide the winner of the cavarly contract. On the day of the race, Granny breaks the trio out of jail, and after winning both the race and the contract, Stony forces Dixon to confess to Cameron's murder.
