The circus dancer Lulu is a thoroughly liberal being. Although she loves her former savior, the clown Alfredo, she begins a relationship with the noble Henri von Reithofen. Henri kills himself ruined by the horrendous expenses for Lulu. She however is fishing for the next rich patron, the much older Baron Waldheim. His son knows Lulu and warns his father that she will also hurt him. Waldheim succumbs to Lulus's insinuations and punishes his son.

The outskirts of New York: Cedrik Errol, 8 years old, lives in miserable conditions with his widowed mother. Refined features, charming demeanour, and always neatly dressed, he earns the nickname “The Little Lord.” One day a lawyer comes saying he is the grandson (and only heir) of Lord Fauntleroy. Cedric travels to England and quickly gets friendly with the grumpy old gentleman.