The village of Sleepy Hollow is getting ready to greet the new schoolteacher, Ichabod Crane, who is coming from New York. Crane has already heard of the village's legendary ghost, a headless horseman who is said to be searching for the head that he lost in battle. The schoolteacher has barely arrived when he begins to pursue the beautiful young heiress Katrina Van Tassel, angering Abraham Van Brunt, who is courting her. Crane's harsh, small-minded approach to teaching also turns some of the villagers against him. Soon there many who would like to see him leave the village altogether.

An innocent man goes to prison for obstruction of justice when his wife refuses to reveal that her father was killed by her mother (and it wasn't suicide). When he is finally released, he meets and becomes involved with a young woman who belongs to the town's influential elite. Once again, he finds himself caught up in intrigue - which eventually leads to his exposing the mayor of the town as corrupt.