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In the small town of Harrington during 1912, twelve-year-old, recently orphaned Pollyanna Whittier comes to live with her aunt, Polly Harrington, whose ancestors founded the town. Polly is kind but runs both her house and the town with an austere rigidity, and when Pollyanna arrives, in the hand-me-down clothes from her parents' missionary station in the British West Indies, her aunt dismisses her to an attic room. Although the servants, assistant Nancy Furman, cook Tillie Lagerlof and maid Angelica, treat the girl with similar brusqueness, Pollyanna utilizes what her father termed "the gladness game" to find a positive aspect even in her lonely new life, and enjoys the majesty of the house and grounds. At dinner, Pollyanna tries hard to please Polly, but cannot help spilling her milk and shocking Polly with her frank assessments of the family's wealth. Polly first forbids Nancy to see her beau, George Dodds, then cautions Pollyanna to act with the highest propriety in order to represent well the Harrington family. After Pollyanna throws her arms around her aunt to say goodnight, however, Polly warms to her and declares that Pollyanna must have a new wardrobe. The next day, Polly buys the girl outfit after outfit, then leaves Pollyanna in town under Nancy's care. When George approaches them, Nancy pretends the amorous young man is her cousin "Fred," and the three share ice cream. Later, Pollyanna unnerves Nancy by admitting that she knows "Fred" is George, but when Polly scolds them for returning late, Pollyanna earns Nancy's gratitude by taking the blame for their tardiness. Meanwhile, a burst water pipe at the old Harrington House, now the town orphanage, has attracted the attention of Polly, Mayor Karl Warren and Polly's former boyfriend, Dr. Edmund Chilton, who is back in town after a five-year absence. Polly has called a town meeting at her home to deal with the situation, and although Pollyanna is sent upstairs, she hides in a large plant to listen. Ed, who is trying to stay out of the town's business, sees the girl and feeds her snacks through the foliage while Karl tries to convince the town that the overcrowded, dilapidated orphanage must be rebuilt. Polly, however, is adamant that her family home be preserved, and the townspeople are too frightened of her influence to disagree. After Karl leaves in a fury, Pollyanna retreats to the kitchen, where Angie is critical of Pollyanna's unfailing cheerfulness, but Nancy and Tillie stick up for the girl, and warn her that the coming Sunday will be difficult to bear. On Sunday, everyone attends church, where Rev. Paul Ford delivers the sermons that Polly prepares for him, preaching of God's dark wrath and the dire consequences of sin. Afterward, when Polly's staff complain about the sermon, Pollyanna explains the glad game and points out how nice it is that the next Sunday is six days away. In town soon after, Pollyanna passes the orphanage, where she sees young Jimmy Bean escape down a tree. Although she scolds him, she joins him at the fishing hole, and when she spots Ed there, subtly relates that Polly will be home alone all day. Later, Jimmy takes Pollyanna to explore the dilapidated manor of crotchety Mr. Pendergast. When Mr. Pendergast catches Jimmy, Pollyanna chases after them to rescue her friend, and soon convinces the old man not to call the constable. Although he pretends to be cruel, Mr. Pendergast is actually lonely and kind, and when Pollyanna admires a rainbow reflected onto the wall through a glass prism, he explains the principles of light to her. Meanwhile, Ed visits Polly and tries to speak frankly about his continuing love for her, but she changes the subject and soon the two are arguing. The next day, Polly sends Nancy and Pollyanna to town with charity baskets, and when it soon becomes clear to the girl that the recipients find the baskets patronizing, she presents each basket as a gift from one friend to another. The last stop is to Mrs. Snow, a cranky shut-in who considers herself an invalid. Although Nancy and Mrs. Snow's daughter, Mildred, are terrified of the older woman, Pollyanna soon charms Mrs. Snow by stringing up prisms to throw rainbows on her wall. At the same time, Karl and Ed are organizing a fund-raising bazaar for a new orphanage. An enthusiastic Pollyanna brings Jimmy to visit Mr. Pendergast, who is secretly thrilled to see them, and convinces the old man to sell "rainbow maker" prisms at the bazaar. She then asks Mrs. Snow to make a quilt, but the shut-in is busy choosing her own coffin liner. Although Pollyanna tells Mrs. Snow how she once asked the mission for a doll but got crutches by mistake, emphasizing how she managed to feel glad that she did not need crutches, Mrs. Snow remains ill-humored, prompting Pollyanna to leave in frustration. Soon, Polly hears that Nancy and Pollyanna are involved with the bazaar, and forbids them to continue. Karl and Ed then learn that many townspeople are too frightened of Polly's authority to attend the bazaar, so Ed confronts Polly at her house to ask for her cooperation. Polly remains cool and suspicious, but after Ed accuses her of having "no love to give," she cries in secret. Outside, Ed, George and Nancy commiserate, and after hearing Pollyanna comment that "no one can own the church," go to Paul to enlist his support. Paul, however, is also too frightened to stand up to Polly. Later, Pollyanna visits Paul as he practices his sermon, and inspires him by relating her father's own struggles with reaching his flock and his eventual reliance on Abraham Lincoln's statement that "When you look for the bad in mankind expecting to find it, you surely will." The next Sunday, Paul apologizes to the congregation and preaches joy instead of doom, after which he urges everyone to go to the bazaar. Although Polly is horrified, the town is galvanized, and that night, the bazaar is a huge success. Pollyanna has been forbidden to attend, but Jimmy climbs the tree outside her window and persuades her to sneak out with him. At the bazaar, a suddenly healthy Mrs. Snow has arrived with her finished quilt and secretly arranges for Pollyanna to win a doll. Hours later, Pollyanna clutches the beloved doll as she climbs back up the tree, but at the top, she loses her balance and crashes to the ground. Ed soon diagnoses her with partial paralysis, stunning the household, which gathers around Pollyanna's bed, hoping to cheer her up. When Paul visits, a devastated Polly questions how God could allow such suffering, but Paul reminds her that they all should be grateful to God for sending Pollyanna, who has touched the whole town with her optimism. Ed tells Polly that, although they can attempt to operate on her legs, Pollyanna's own attitude will most affect her recovery. Polly, who blames herself for the accident, tells Pollyanna she loves her, but the girl remains distraught and refuses to play the glad game. In private, Polly begs Ed for another chance, and they hope that together they can give Pollyanna enough love to recuperate. Suddenly, the gardener rushes in with the news that people are trampling the flowerbeds. When Polly opens the front door, she sees the entire town approaching, each person carrying a gift for Pollyanna. Ed carries the reluctant girl downstairs, where one by one the townspeople each wish her health. Mrs. Snow leads the group, advocating positive thoughts, while Mr. Pendergast announces that he has adopted Jimmy, and Nancy shows Pollyanna her new engagement ring from George. After Paul points out that they looked for the good in people and found it, Pollyanna, beaming, turns to her aunt, who embraces her. Later, as Polly and Ed take her by train to the hospital, Pollyanna watches joyfully from the window while the townspeople erect the slogan "The Glad Town" under the Harrington railroad sign.