English tourist Iris Henderson (Margaret Lockwood) arrives at the "Gasthof Petrus" inn in the country of Bandrika, "one of Europe's few undiscovered corners". Iris is returning to Britain to marry a "blue-blooded cheque chaser", but an avalanche has blocked the railway line. The stranded passengers are forced to stay the night at the inn, including Charters and Caldicott, cricket enthusiasts who want to return to England to see the last days of the Test match.
That evening, Iris complains about loud folk music coming from the room above her. She has the guilty musician, Gilbert Redman (Michael Redgrave), thrown out of his room, only to have him move into hers, forcing her to capitulate.
Miss Froy (Dame May Whitty), a former governess and music teacher, listens to a tune performed by a folk singer under her window. Unseen by her, the singer is killed.
The next morning, before catching the train, Iris is hit on the head by a planter apparently aimed at Miss Froy, who then helps Iris onto the train. Also on board are Charters and Caldicott, Gilbert, a lawyer named Todhunter and his mistress "Mrs. Todhunter". As a result of her injury, Iris blacks out. After the train is moving, Iris wakes up in a compartment with Miss Froy and several strangers. She joins Miss Froy in the dining car for tea. Unable to be heard above the train noise, the elderly lady writes her name on the window with her finger. Soon after, they return to their compartment, where Iris falls asleep.
When Iris awakens, Miss Froy has vanished. The strangers in her compartment say they know nothing about an English lady. Even Todhunter, who spoke with Miss Froy earlier, pretends not to remember her in an attempt to avoid any possible scandal. Iris searches, but cannot find her. She meets up with Gilbert, who agrees to help. Dr. Hartz (Paul Lukas), a brain surgeon, says Iris may be suffering from concussion-related hallucinations. Charters and Caldicott also claim not to remember Miss Froy, because they are afraid a delay would make them miss the cricket match.
Another lady appears, dressed exactly like Miss Froy, but Iris and Gilbert continue to search. They are attacked by a knife-wielding magician, Signor Doppo. They start to suspect that Dr. Hartz's patient, whose face is covered by bandages, is Miss Froy. Dr. Hartz tells his fellow conspirator, a British woman dressed as a nun, to drug Iris and Gilbert. Then, convinced they will soon be asleep, Hartz admits to them that he is involved in the conspiracy. The false nun does not follow Hartz's instructions out of loyalty to her fellow countrywoman; Gilbert and Iris escape, free Miss Froy and replace her with one of the conspirators.
When the train stops near the border, Dr. Hartz discovers the switch. He has part of the train diverted onto a branch line, where soldiers await. Gilbert and Iris inform their fellow passengers of what is happening. The train pulls to a stop and a uniformed soldier requests that they all accompany him. They knock him out and take his gun. Another soldier fires, wounding Charters in the hand, and a shootout begins.
During the gunfight, Miss Froy reveals to Gilbert and Iris that she is a British agent who must deliver a message to the Foreign Office in Whitehall. The message is encoded in the tune that the folk singer sang. Gilbert memorises the tune. With his help, Miss Froy slips away into the forest. Todhunter attempts to surrender, waving a white handkerchief, and is shot dead. Gilbert and Caldicott then commandeer the locomotive, and the group escape across the border.
In London, Charters and Caldicott discover the Test Match has been abandoned. Iris jumps into a cab with Gilbert in order to avoid her fiancé, and Gilbert kisses her. They arrive at the Foreign Office, but Gilbert is unable to remember the vital tune. Then he hears the melody on the piano; they are joyfully reunited with Miss Froy.
The Lady Vanishes was originally called The Lost Lady, and Irish director Roy William Neill was assigned by producer Edward Black to make it. A crew was dispatched to Yugoslavia to do background shots, but when the Yugoslav police accidentally discovered that they were not well-portrayed in the script, they kicked the crew out of the country, and Black scrapped the project. A year later, Hitchcock could not come up with a property to direct to fulfil his contract with Black, so he accepted when Black offered The Lost Lady to him. Hitchcock worked with the writers to make some changes to tighten up the opening and ending of the story, but otherwise the script did not change much.
At first, Hitchcock considered Lilli Palmer for the female lead, but went instead with Margaret Lockwood, who was at the time relatively unknown. Lockwood was attracted to the heroines of Ethel Lina White's stories, and accepted the role. Michael Redgrave was also unknown to the cinema audience, but was a rising stage star at the time. He was reluctant to leave the stage to do the film, but was convinced by John Gielgud to do so. As it happened, the film, Redgrave's first leading role, made him an international star. However, according to Robert Osborne, host of Turner Classic Movies, Redgrave and Hitchcock did not get along; Redgrave wanted more rehearsals, while Hitchcock valued spontaneity more. The two never worked together again.
The film contains a major continuity error during the bedroom scene near the beginning in which Iris and her two friends are having a goodbye party wearing very little. Iris is standing above the footman delivering another round of drinks wearing a tiny sweater in closeup but only lingerie in all the other shots. With Hitchcock's fabled attention to detail, it is surprising that he let the mistake stay in the picture.
The film, which was shot at Islington Studios and Shepherd's Bush, and on location in Hampshire, including at Longmoor Military Camp, was the first to be made under an agreement between Gaumont-British and MGM, in which Gaumont provided MGM with some of their Gainsborough films for release in the UK, for which MGM would pay half the production costs if MGM decided to release the film in the US. In the case of The Lady Vanishes, however, 20th Century-Fox did the American release.
Filming was briefly interrupted by a strike of electricians.
The plot of Hitchcock's film differs considerably from White's novel. In The Wheel Spins, Miss Froy really is an innocent old lady looking forward to seeing her octogenarian parents; she is abducted because she knows something (without realising its significance) that would cause trouble for the local authorities if it came out. Iris' mental confusion is due to sunstroke, not a blow to the head. In White's novel, the wheel keeps spinning: the train never stops, and there is no final shoot-out. Additionally, the supporting cast differs somewhat; for instance, in the novel, the Gilbert character is Max Hare, a young British engineer building a dam in the hills who knows the local language, and there is also a modern-languages professor character who acts as Iris's and Max's interpreter who does not appear in the film. The cricket-obsessed characters Charters and Caldicott were created especially for the film and do not appear in the novel.
The plot has clear references to the political situation leading up to World War II. The British characters, originally trying their hardest to keep out of the conflict, end up working together to fight off the jack-booted foreigners, while the lawyer who wishes to negotiate with the attackers by waving a white flag gets his just deserts.
Alfred Hitchcock can be seen at Victoria Station, wearing a black coat and smoking a cigarette, near the end of the film. The film marks the first appearance of the comedy double-act Charters and Caldicott (played by Naunton Wayne and Basil Radford).
When The Lady Vanishes opened in the UK it was an immediate hit, becoming the most successful British film to that date. It was also very successful when it opened in New York. In a contemporary review, the Monthly Film Bulletin described the film as an "out of the ordinary and exciting thriller", praising Hitchcock's direction and the cast, specifically Michael Redgrave, Paul Lukas and Dame May Whitty.
The film has retained its popularity through the years. In his review for the BBC, Jamie Russell gave the film four out of five stars, calling it a "craftily sophisticated thriller" and a "cracking piece of entertainment". In his review for BFI Screenonline, Mark Duguid wrote that the film was "arguably the most accomplished, and certainly the wittiest of Hitchcock's British films, and is up there with the best of his American work". Duguid singled out the young writing partnership of Frank Launder and Sidney Gilliat, noting:
The story is blessed by great characters and many witty and imaginative touches, in particular the conceit by which the passengers are each given selfish motives for refusing to verify Iris' story. As well as the chemistry between the two leads, the film has some of Hitchcock's best character parts, with Basil Radford and Naunton Wayne particularly good value as the cricket obsessed Charters and Caldicott.
The American film critic and historian Leonard Maltin gave the film four out of four stars in his Movie Guide, and included the film in his list of 100 Must-See Films of the 20th Century. The Guardian called the film "one of the greatest train movies from the genre's golden era", and a contender for the "title of best comedy thriller ever made". The film frequently ranks among the best British films of all time.
The Lady Vanishes was named Best Picture of 1938 by The New York Times. In 1939, Hitchcock received the New York Film Critics Circle Award for Best Director, the only time Hitchcock received an award for his directing.
The humorous characters Charters and Caldicott proved to be so popular that they were featured in three somewhat related films that were made by other writers and directors. Night Train to Munich (1940) was the first of the three and was directed by Carol Reed. This film was also written by Sidney Gilliat and Frank Launder and starred Margaret Lockwood (playing a different character than in The Lady Vanishes) as well as Rex Harrison. Night Train to Munich was given a DVD release by Criterion.
The duo also appeared in 1941 in Crook's Tour written by Barbara K. Emary and directed by John Baxter. This film was included as a bonus feature on the Criterion DVD and Blu-ray release of The Lady Vanishes. The last film to feature the Charters and Caldicott characters was Millions Like Us (1943), which was once again written by Gilliat and Launder, who also assumed the role of directors. Hitchcock had nothing to do with any of these films, and indeed he had relocated to Hollywood by the time they went into production.