Act One

The show begins immediately after Annie ended, on Christmas morning of 1933.

The billionaire Oliver Warbucks, his personal secretary, Grace Farrell, his servants, his newly adopted daughter, Annie, and her friends from the Municipal Orphanage are singing the closing bars of the song, "A New Deal for Christmas," which ended Annie. Two servants enter with a huge Christmas present, and Sandy jumps out of it, happily reunited with Annie. Oliver Warbucks insists that Annie begin calling him Daddy, and Annie celebrates her new name, Annie Warbucks ("Annie Ain't Just Annie Anymore"). As Daddy Warbucks is settling down to sing some Christmas carols with Annie and the orphans, his attorney, Simon Whitehead, and several of his accountants appear with business matters that he needs to consider. The children leave as Daddy discusses his income taxes with his visitors. That conversation is interrupted by the arrival of Harriet Doyle, the Commissioner of the New York City Department of Child Welfare.

In Daddy Warbucks' study, Harriet Doyle reveals the reason for her visit. Since Daddy is not married, he has broken the law by adopting Annie. Commissioner Doyle has come to return Annie to the orphanage ("Above the Law"). As her assistant, Miss Clark, prepares to take Annie away, Attorney Whitehead suggests that Daddy Warbucks get married quickly so that he can keep Annie. The Commissioner agrees to allow Annie to remain at the mansion for 60 days to give Daddy time to find a suitable wife. Daddy instructs Grace, who obviously envisions herself as a possible wife for him, to prepare a list of eligible women. Annie is despondent over the news that she will have to share Daddy Warbucks' affection with a stranger ("Changes"). Warbucks leaves with Whitehead and Grace to begin the search for the future Mrs. Warbucks.

Annie, on the balcony of the mansion, laments the fact that a kid and her father can't make a family ("Changes").

Back at the Municipal Orphanage, Tessie, one of the orphans, has been returned by a couple who had thought they wanted to adopt her. Annie arrives and shares her troubles with her friends. She shows them pictures of the women being considered as a possible wife for Daddy Warbucks, and they find something dreadful about each candidate ("The Other Woman"). Daddy arrives with Dr. Margaret Whittleby, a child psychologist, who is one of the candidates. Annie leaves to have lunch with Daddy and Dr. Whittleby as the orphans respond with disdain to the idea of the psychologist as a mother for Annie.

A month later, Commissioner Doyle is checking up on Warbucks' progress. After interviewing 100 candidates, he still has no fiancée. Mrs. Kelly suddenly appears on the scene; she is introduced as an employee of Commissioner Doyle. Warbucks is taken by her manner and gives her taxi money. Mrs. Kelly calls Annie "punkin" and says endearing things to her. Annie overhears Grace talking on the phone to a member of President Roosevelt's staff, who is offering her a job in Washington. Grace tells Annie that Warbucks' marriage plans have caused her to think that she will have no place in the new scheme of things. She insists that Annie is mistaken when the child claims that Daddy should marry her. Grace leaves as Annie plots with the servants to convince Daddy to marry Grace.

For Annie's sake, the servants decide to risk their positions by commenting on Daddy Warbucks' marriage plans ("That's the Kind of Woman"). They advance the idea of Grace as the perfect wife. When they are through, Grace assures Daddy Warbucks that she had nothing to do with their efforts. Commissioner Doyle insists that Grace is not mature enough to be considered as acceptable by her office. Grace reveals her plan to leave for Washington, which Commissioner Doyle encourages, as Warbucks tries to convince her to stay. After everyone leaves, Annie confesses that she put the servants up to supporting the idea of Grace. Daddy confesses that he does care about Grace but knows that she thinks he is too old for him ("A Younger Man"). Annie fails to convince him to tell Grace of his feelings.

Daddy Warbucks goes to Commissioner Doyle's office to sign papers related to his agreement to find a wife within 60 days. There, he once again encounters Mrs. Kelly, who assists him with the paperwork and thanks him for his kindness in giving her cab fare. He learns that she is from his old neighborhood, Hell's Kitchen, and Annie observes that he is very taken by her. Annie tries to distract him, but Mrs. Kelly tells Warbucks about her hard early life ("But You Go On"). During the song, she reveals that she is divorced and that her child has died. Commissioner Doyle appears and chastises her for socializing on the job. Warbucks demands that she be added to his list of eligible women as the Commissioner loudly objects. A phone call from England about a business matter causes Warbucks to leave the office abruptly with his entourage. Left alone, Commissioner Doyle congratulates Mrs. Kelly on her success. We learn that her name is Sheila, and that they are mother and daughter. Mrs. Kelly has previously served eight years in jail for killing an "old geezer" with arsenic. They vow not to get caught this time ("Above the Law").

Daddy Warbucks prepares to go to England to deal with a financial crisis. He tells Grace to tell Commissioner Doyle that, upon his return, he will marry one of the women whom he's already met. He signs the marriage license papers at the urging of Whitehead so that he can proceed with the engagement and wedding quickly when he gets back from England. When Daddy Warbucks asks Grace to help him decorate for his new wife, she decides that she has to leave for Washington at once. Annie is distressed to learn of her planned departure. Commissioner Doyle comes in, and Annie begs her to approve of Grace as Daddy's wife. She refuses and threatens to return Annie to the orphanage. Annie tells the orphans who are visiting her that she is going to run away – her father is too busy to pay attention to her, Grace is leaving and she feels as if the whole situation is her fault. She says that she plans to go "Out West." She says that she has herself to depend on – that will have to be enough ("I Got Me"). She gets Sandy and runs out. Daddy Warbucks learns that Annie has run away and Grace has departed for the White House, so he cancels his important travel plans and calls the White House for help.

Annie and Sandy are in a Pennsylvania Railroad train yard. They hop on a freight train with the help of two hobos ("I Got Me – Reprise").

Act Two

It is six weeks later. Annie is sitting on a box in the yard of a Tennessee sharecropper's home. A weather-beaten fence with a mailbox, a few crates and some burlap are seen in the shadowy twilight. Annie is eating from a bowl as she is watched by Ella and Reverend Alvin Paterson, as well as C.G., their ten-year-old daughter. Annie and Sandy found refuge in the Paterson house when she was being chased by railroad police. Annie lies, telling the Patersons that her name is Ruby Keeler. Mr. Stanley, the mill owner, arrives and offers Alvin a day of work at the mill for five cents an hour. He asks who Annie is, and the Patersons claim that Annie is Alvin's niece. The Patersons explain to Annie that the Tennessee River is the source of many of the area's economic woes because it floods in the spring and dries up in the summer. Annie tells Ella and C.G. that she ran away because her father was getting married again and didn't want her. She thinks that she did him a favor by getting out of his life. Ella says that Annie doesn't understand "Love." She tells Annie that you have to "open, open wide – there's a lot of room inside for love." Annie decides to go home and accepts the Paterson family's offer to take her back to New York. She says that they can collect the reward money. She reveals her real identity, and they realize that they have heard about her on the radio. They think the reward is $100.

At the White House, national policy is at a standstill as the search for Annie goes on. Senator Vandenberg accuses the President of failing to end the Depression because of the preoccupation with Annie. The President responds that he believes the White House staff has the heart, brains and dedication, both to end the Depression and find a lost little girl. The Patersons appear with Annie and are shocked to find out that the reward is actually $100,000. While at the White House, the Patersons take advantage of the opportunity to tell the President their concerns about the Tennessee River ("Somebody's Got to Do Something"). At the conclusion of their appeal, the idea to create the Tennessee Valley Authority has been born. Sheila Kelly, using the alias of Florence, tells her mother, Commissioner Doyle, that the involvement of the White House and the FBI scares her. She wants to end their scheme. Her mother convinces her to continue, and they discuss their plot, which includes getting rid of everyone from Daddy and Annie to Grace and the servants ("Leave It to the Girls"). Grace overhears Commissioner Doyle refer to Mrs. Kelly as Florence and becomes suspicious.

On board the Staten Island Ferry, the orphans celebrate Annie's return ("All Dolled Up"). They are joined by President Roosevelt, the Patersons, Annie, Daddy Warbucks, Attorney Whitehead and Mrs. Kelly. Warbucks and Mrs. Kelly waltz romantically together and then include Annie in their dance. The Patersons report that they have invested their reward money in Warbucks' stock. Mrs. Kelly sings a lullaby to Annie. The song that she sings happens to be the lullaby that Daddy Warbucks' mother used to sing to him. (He has forgotten that he mentioned this fact to Commissioner Doyle.) When Commissioner Doyle reminds him that he is now violating his agreement to marry within 60 days, he quickly proposes to Mrs. Kelly. The wedding is set for the following Wednesday, and Mrs. Kelly leaves the party. Daddy Warbucks and Grace are left alone. She wishes him happiness as he goes inside to have dinner with Annie and his guests, leaving her alone ("It Would Have Been Wonderful").

A suite in the Waldorf-Astoria Hotel looks like the set of an Astaire-Rogers movie. Everyone is preparing for the wedding, and Daddy tries to reassure Annie that they will be happy with Mrs. Kelly ("When You Smile").

In the ballroom at the Waldorf-Astoria, the orphans march in the wedding procession ("Wedding, Wedding"). As Reverend Paterson is about to declare Daddy Warbucks and Mrs. Kelly husband and wife, a cablegram arrives, announcing that Warbucks is ruined. Mrs. Kelly starts to run out but is stopped by Grace, who reveals Mrs. Kelly's true identity. Sheila Kelly and Commissioner Doyle, in turn, reveal that Attorney Whitehead was behind the entire plot to get Mrs. Kelly married to Warbucks in order to kill him and take his money. Whitehead resented the fact that Warbucks – a Tenth Avenue Shanty Irish – should have more money than he did, himself, since he was born into one of the oldest families in Boston and attended Harvard. Annie then reveals the cablegram was a fake sent by Grace, who wanted to have the chance to see if Mrs. Kelly really loved Warbucks. Warbucks learns that he is still rich and now doesn't have to get married. However, he decides that he is not so old after all and finally asks Grace to marry him. They decide to adopt all of the orphans, and the wedding proceeds. Annie tells Molly that she always knew the ending would be happy ("I Always Knew").