The film tells the story of two close childhood friends, a handsome but poor fisherman, Pete Quilliam (Carl Brisson), and a well-educated middle-class lawyer, Philip Christian (Malcolm Keen); Both the young men are smitten with beautiful and lively Kate (Anny Ondra), the pub owner's daughter. In Pete's case, Kate is also interested in him, or at least she enjoys having him as a suitor.
Pete proposes, asking Philip to make the case to Kate's tough father, Old Caesar (Randle Ayrton). The father refuses to consent to the marriage, because Pete is penniless. Pete decides to go to Africa to make his fortune, so he will be considered eligible to marry her, and he asks Kate if she will "wait for him". At first she jokes around, but finally she says yes. Pete then asks Philip to take care of Kate until he returns.
In his absence, Philip starts calling on Kate almost every day. Kate and Philip become strongly attracted to one another, and start an affair while visiting an old mill.
News reaches the village that Pete has been killed upcountry in Africa. Philip and Kate are shocked but Kate is relieved to realize that they can now plan their lives together. Philip's career has been going well, and he is preparing to assume the powerful position of Deemster, the island's chief magistrate.
However, it then turns out that Pete is still alive, and has been successful in Africa. He lets Philip know via telegram that he is returning. Pete arrives and is extremely happy to be back to his village and to see his old sweetheart. Philip and Kate are shocked and appalled, but they do not let anyone know what has passed between them. Old Caesar is now delighted to agree to Kate marrying Pete. The wedding reception is celebrated in the old mill, where Old Caesar sternly warns the newlyweds to remember that God will punish anyone who violates the vows of marriage.
Kate is still in love with Philip, and can hardly bear to be married to Pete.
As the weeks pass, Pete is thrilled to find out that Kate is pregnant, and he naturally assumes he is the father. When Kate's daughter is born, not long afterwards Kate is desperate and decides to leave Pete. She walks out, leaving her baby behind, and a note saying that she had loved another man, and still loves him. Pete is appalled and does not know where Kate went, but he tells the villagers that Kate needed a vacation, so he sent her to London for a while. During the weeks she is gone, Pete proves himself to be a wonderful father, taking care of the baby very well, and comforting himself by believing that although Kate has gone, he still has their baby to love.
Kate persuades Philip to hide her at his law offices, hoping she can still somehow have a life with him. However, Philip is about to become the Deemster, and he is unwilling to ruin his career by running off with her. Frustrated and distraught, Kate returns to the house to take the baby. She tells Pete he is not the baby's father. Pete is stunned and refuses to believe her. He also refuses to give up the child. In desperation, Kate leaves the house and tries to commit suicide by throwing herself off the quay.
Kate is rescued by a policeman. Attempted suicide is classified as a crime, and Kate is brought to trial on the first day that Philip serves as Deemster. Now Philip is stunned and hardly knows what to do. When Pete appears in the courtroom to plead for his wife, Philip agrees to hand Kate over to him. But Kate refuses to go. Kate's father, Old Caesar, who is watching carefully, finally understands that Kate and Philip had an affair. Old Caesar gets up and loudly condemns Philip for being the "other man". Philip publicly admits his extreme moral failings. He removes his wig and surrenders his official position, and then leaves the court.
In the final scene, Philip and Kate sadly prepare to leave the island. They arrive at Pete's house to take away the baby. Kate picks up the child, while Philip and Pete stand at opposite ends of the room. She brings the child over to Pete to say one last goodbye, and he breaks down, having finally lost everything. Philip and Kate leave the cottage to the jeers and condemnation of the villagers, who have been watching the scene through the windows.