In a Manhattan nightclub, a hustler named Bill O'Brien (Douglas Fairbanks, Jr.) scouts for his next victim. He thinks he's found the perfect "sucker" when he spots Charles Engle (John Qualen). Bill thinks he's rich but in reality, Engle is on the verge of suicide because owes $3,000 to his partner. He had stolen funds from the business to spend on a gold-digging girlfriend. Engle is now penniless, and his partner has threatened to turn him over to the police. For the moment, Bill is unaware of all this, so he hatches a scheme to lure Engle into a crooked poker game. In order to make the plan go over, he enlists the help of a dancer who has caught his eye, Nina Barona (Rita Hayworth).

Another patron of the club is "has-been" playwright Gene Gibbons (Thomas Mitchell). He learns of Engle's suicide plot and decides to help him find a solution to his predicament. When he finds out Bill thought Engle was a millionaire and was planning to take him into a dishonest poker game, Gibbons gets an idea. He knows that the crooks would swindle the supposed millionaire by letting him win at first, then pull their tricks to turn the game in their favor. Gene's idea is for Engle go to the game, and before the crooks stop letting him win, he will escape, money in hand and all worries vanquished. As the plan gets off the ground, Nina begins to have feelings for Bill, but he convinces himself that he cares for no one other than himself. Soon after, Engle is on his way to the gambling den.

They decide that once Engle has won $3,000, he'll say he's going out to check on his drunken friend Gibbons, then he will "vanish into the night". Engle enters the game and everything goes as planned. He wins the money, then says he's going to check on Gibbons. But the gamblers have become suspicious. One follows him and Engle is seen trying to make his exit. Before the crooks reach him, however, the cops arrive. When he tells the police the money found on him belongs to his business partner, his debt is paid and Engle's worries are over. Gibbons reunites with his estranged wife, and Nina succeeds in softening Bill's heart. He's found the woman that can turn him into an honest man.

Angels Over Broadway did satisfactory business at the box office upon it's release in October of 1940, but it was generally praised by the critics, and Ben Hecht received an Oscar nomination for "Best Original Screenplay". As the unemployed dancer who latches onto Fairbanks, Rita garnered good reviews, and Thomas Mitchell's portrayal of a drunken playwright is considered by many to be the best performance of his career. Of course, he is best-known as Scarlett's father, Gerald O'Hara, in Gone With the Wind.