Wilby Daniels is constantly misunderstood by his father, Wilson. Wilson thinks Wilby is crazy half the time because of his elder son's often dangerous inventions. As a retired mailman who often ran afoul of canines, he has a hatred of dogs, and he can't understand why his younger son, Montgomery "Moochie" wants a dog so badly.
Wilby and his self-centered rival Buzz Miller take a new French girl, Francesca Andrassé, to the local museum. Wilby gets separated from the other two, who leave without him. Wilby ends up in a new wing, where he encounters former acquaintance Professor Plumcutt (whose newspaper Wilby used to deliver), who tells him all about mystical ancient beliefs, including the legend of the Borgia family, who used shape-shifting as a weapon against their enemies.
On the way out, Wilby collides with a table of rings, ending up with one in the cuff of his pants which he finds later. It is the cursed Borgia ring, and when he reads the inscription on it, he turns into Chiffon, Francesca's shaggy Bratislavian sheepdog. Confused about what has happened, Wilby as a dog goes to Professor Plumcutt, who says he has invoked the Borgia curse upon himself, which can only be broken through a heroic act of selflessness. After getting chased out of his own house by his father (who hasn't realized the dog is actually his older son), Wilby has a series of misadventures, as he constantly switches back and forth between human and dog forms. Only Moochie and Professor Plumcutt know his true identity when he is a dog, as Wilby has spoken to them both in dog form. Finally, he goes to a local dance (as a human) and while dancing turns into a dog. He runs out quickly, and goes home.
The next day, Wilby (as a dog) and Moochie are talking when Franceska's butler Stefano comes out and drags Wilby into the house. Stefano and Dr. Valasky (Franceska's adoptive father), discuss plans to steal a government secret, and Wilby (still a dog) overhears. Unfortunately for him, he transforms into human Wilby right in front of the spies and is discovered, but not before he heard Dr. Valasky expressing his wish to get rid of his own daughter.
The spies capture him and force Franceska to leave with them, leaving Wilby (human) bound and gagged in the closet. Moochie sneaks into the house after Dr. Valasky, Stefano and an unwilling Franceska leave, and discovers Wilby, as a dog, bound in the closet. Wilby reveals the secret to his dumbfounded father, who goes to the authorities, only to be accused of being either crazy or a spy himself.
When Buzz appears at the Valasky residence to take Franceska on a date, Wilby (as a dog) steals Buzz's hot rod. Buzz reports this to Officers Hansen and Kelly, who are in disbelief until they see the shaggy dog driving Buzz's hot rod. Mr. Daniels and Moochie follow Buzz and the police, who end up chasing everyone. The spies attempt to leave via boat, but the police call in the harbor patrol to apprehend Dr. Valasky and stop his boat. Wilby (dog form) swims up and wrestles with the men, as Franceska gets knocked out of the boat. He then saves her life and drags her ashore, breaking the curse. The final transformation occurs when a net drops over Buzz and Chiffon, who growls at Buzz. Wilby suddenly reverts to human form, shouting at Buzz, who is dumbfounded that Wilby suddenly appeared out of nowhere.
Mr. Daniels and Chiffon are declared heroes, Franceska leaves for Paris without her evil adoptive father and former butler (both of whom have been arrested for espionage; and she gives Chiffon to the Daniels family for them to keep as thanks. Since Mr. Daniels has gotten such commendation for foiling a spy ring due to "his love of dogs", he can no longer have his dog-hating attitude, and allows Moochie to care for Chiffon as he wanted a dog all along. Wilby and Buzz decide to forget their rivalry over Francesca and resume their friendship."