Jimmy Durante stars as a boxing manager and fast-talking hustler in this film version of the popular Ham Fisher comic strip. When Knobby Walsh comes across simple farmboy Joe Palooka, the son of retired boxing champ Pete Palooka, he decides to take him to New York and make him as famous as his father. The fact that Joe doesn't seem to possess his father's natural ability in the ring doesn't stop him from beating champ Al McSwatt by sheer luck. With the money rolling in, Knobby arranges a series of crooked fights for Palooka, who is beginning to let the trappings of success get the best of him. After an overconfident Palooka accepts a rematch against McSwatt, he finds that his bright career may come to an abrupt end.

The first in a series of films inspired by the long running comic strip, Palooka features James Cagney's younger brother William as Al McSwatt, and a performance by Durante of his signature song "Inka Dinka Doo."