In a quaint American town, a cocker spaniel named Lady is the beloved pet of a refined couple known as Jim Dear and Darling. Lady enjoys a pampered life, complete with a fancy collar and plenty of attention from her owners. Her idyllic existence begins to shift when Jim Dear and Darling become preoccupied with preparations for a coming baby. Lady seeks advice from her dog friends, Jock and Trusty, who reassure her that she remains an important part of the family. However, her worries intensify when Aunt Sarah arrives with her troublesome Siamese cats and takes a disliking to Lady.

Feeling neglected and misunderstood, Lady has a chance encounter with a street-smart stray mutt named Tramp, who introduces her to a world of adventure beyond the confines of her backyard. Tramp shows her how to navigate the streets, evade dogcatchers, and appreciate life from a different perspective. During their adventures, Lady learns about the challenges and freedoms of being a stray, and starts to see Tramp in a new light. Their bond grows as they face various obstacles together, but Lady soon realizes she must choose between the safety of her familiar home and the exhilarating, but unpredictable life with Tramp.