Kris Kringle is seen walking down the streets of New York and he stops to tell a store owner he's lining up his window display of reindeer in incorrect order. He finds that the Santa for the Macy's Thanksgiving Day Parade is drunk. Soon after his anger spills out onto Doris he is assigned the task of being Santa as Doris runs the parade and chooses him to fill in. After impressing her and Doris's neighbor Fred and adoring fans alike, Kris is asked by Doris to work at Macy's flagship store on 34th Street in Manhattan. He agrees and Doris gets more than she asks for.
Kris begins meeting with children and then telling their parents where to find the best deals on toys. This isn't a big deal, except that the deals are at other department stores. To the surprise of everyone Kris' action actually creates loyalty in customers to stay at Macy's as they are telling them the truth and not just asking them to purchase from them.
Fred decides to bring Doris' daughter Susan to meet Santa Claus. Susan doesn't believe in Santa Claus as her mother raised her not to believe just like her. But Susan is curious about Santa when she sees him speaking Dutch to a young girl who can't speak English. After this incident Doris tells Kris the old Santa is back and they won't need him anymore. This is after she's read his employment card which states he was born at the North Pole and his reindeer are his next of kin. She finally asks Kris to admit he isn't Santa, something he won't do. So she fires him.
But because Kringle is bringing in so much business they have to keep him, but do so after he undergoes a psychological evaluation which he passes. Unfortunately the man who evaluates him insists Doris let him go. Doris agrees to keep him on if he stays with someone who can look after him to ensure he isn't a danger. Fred offers to do this and the pair set out to work together. Fred on Doris and Kris on Susan. They want them to believe in Santa. In staying in line with this promise Kris promises Susan a house for Christmas.
Sawyer continues to badmouth Kris and eventually Kris cracks, he hits Sawyer over the head with his own umbrella. And Sawyer exaggerates his injuries in order to have Kringle committed to Bellevue Hospital where he's institutionalized as being insane. Kris's case goes to trial where the Judge is being pressured to say Santa Claus isn't real, but he learns that if he's going to win another term in New York he cannot do that. He then asks for evidence that Kris is Santa which Fred is able to produce as thousands of letters have poured in to Kris addressed to Santa. The fact that the letters come from what the Judge considers a competent authority, the United States Post Office he decides to agree with Kris and deem his case dismissed. Fred has won the case for his friend, which he took after leaving his big-time lawyer job in the city to defend Kris.
Susan is seen in the car with her mother and Fred and asks Fred to pull over at a home which she runs inside. Doris and Fred find out that she believes this is the home Kris promised to give her. To which Fred and Doris only believe it is a coincidence...until they see Kris' cane by the fireplace to which they are confounded. Has Kris delivered on his promise to Susan as Santa Claus? That's for you to decide.
