The film tells the story of "Marky" (Shirley Temple), whose father gives her to a gangster-run gambling operation as a "marker" (collateral) for a bet. When he loses his bet and commits suicide, the gangsters are left with her on their hands. They decide to keep her temporarily and use her to help pull off one of their fixed races, naming her the owner of the horse to be used in the race.
Marky is sent to live with bookie Sorrowful Jones (Adolphe Menjou). Initially upset about being forced to look after her, he eventually begins to develop a father–daughter relationship with her. His fellow gangsters become fond of her and begin to fill the roles of her extended family. Bangles (Dorothy Dell) – girlfriend of gang kingpin Big Steve (Charles Bickford), who has gone to Chicago to place bets on the horse – also begins to care for Marky, and to fall in love with Sorrowful, whose own concern for Marky shows he has a warm heart beneath his hard-man persona. Sorrowful, encouraged by Bangles and Marky, gets a bigger apartment, buys Marky new clothes and himself a better cut of suit, reads her bedtime stories, and shows her how to pray.
However, being around the gang has a somewhat bad influence on Marky, and she begins to develop a cynical nature and a wide vocabulary of gambling terminology and slang. Bangles and Sorrowful, worried that her acquired bad-girl attitude means she will not get adopted by a "good family", put on a party with gangsters dressed up as knights-of-the-round-table, to rekindle her former sweetness. She is unimpressed until they bring in the horse and parade her around on its back. Big Steve, returning to New York, frightens the horse, which throws her, and she is taken to the hospital. Big Steve goes there to pay back Sorrowful for trying to steal Bangles but is roped into giving Marky the direct blood transfusion she needs for her life-saving operation. Sorrowful, praying for her survival, destroys the drug which, administered to the horse, would have helped it win the race but killed it soon after. Big Steve, told he has "good blood" and pleased to have given life for a change, forgives Bangles and Sorrowful. They plan to marry and adopt Marky.Shirley Temple as Marthy "Marky" Jane
Adolphe Menjou as Sorrowful Jones
Dorothy Dell as Bangles Carson
Charles Bickford as Big Steve Halloway
Lynne Overman as Regret. The character is meant to be Mafia accountant Otto Berman, best friend of writer Damon Runyon.
Warren Hymer as Sore Toe
Sam Hardy as Benny the Gouge
John Kelly as Canvas Back
Willie Best as Dizzy Memphis
Frank McGlynn Sr. as Doc Chesley
John Sheehan as Sun Rise
Frank Conroy as Dr. Ingalls
Temple, who had previously auditioned for the role of Marky prior to entering her Fox contract and failed to win the part, was loaned out to Paramount by Fox Film thanks in large part to maneuvering by her mother Gertrude. Her mother, recognizing the potential of the role, arranged for a secret meeting and second audition with the director Alexander Hall. This second audition was successful and Shirley Temple was loaned out to Paramount for $1,000 a week. Temple and Dell struck up a close friendship while filming the movie. The scene in which Temple is refusing her food and using rude language ("I don't want no mush" and "I used to be a sissy") had to be redone as Dell could not contain her laughter in the first take. This would be Dell's last completed film of her short career. Temple took Dell's death very hard.
The film was very popular at the box office. As a result of the film's success, Paramount offered Fox $50,000 for Temple's contract, which was declined.
In 1998, Little Miss Marker was selected for preservation in the United States National Film Registry by the Library of Congress as being "culturally, historically, or aesthetically significant".
The film was remade in 1949 as Sorrowful Jones with Bob Hope and Lucille Ball and again as Little Miss Marker in 1980 with Walter Matthau, Julie Andrews, Tony Curtis, Bob Newhart, Brian Dennehy, and Lee Grant. Another remake was 1962's 40 Pounds of Trouble, starring Tony Curtis as a casino manager who is left with an eight-year-old girl.
Scott Ellis and David Thompson are working on a musical adaptation of the film to feature songs by Harold Arlen as its score.