Mickey Moran (Rooney) is the teenaged son of old vaudevillians Joe and Florrie Moran. They live in a small town that's home to a lot of vaudevillians. Joe and Florrie used to be big stars on the vaudeville circuit, but their careers tanked after the coming of talking films at the end of the 1920s, as did those of their friends in the vaudeville neighborhood. Joe is an aspiring performer himself, and he's trying to make it in singing and songwriting, along with his girlfriend Patsy Barton (Garland).
Joe and Florrie hit upon the idea of a vaudeville nostalgia tour to involve all of the old vaudevillians from their town. However, Joe refuses to let Mickey and the other kids of the neighborhood come along and play in the show, despite their obvious talent. Even worse, some of the local busybodies are trying to get the vaudeville kids sent away to the "state work school" now that their parents are leaving. So Mickey, Patsy, and all of the other kids decide to put on a show of their own, to prove to their parents that they have what it takes.
Based on the musical Babes in Arms by Richard Rodgers and Lorenz Hart, although the story is greatly changed.
Margaret Hamilton plays Martha Steele, one of the snooping busybodies who want the vaudeville kids sent away.
- Cannot Spit It Out: Mickey can't say "I love you" to Patsy, but he manages to get the idea across anyway.Mickey: I do—what you want me to say and I won't—very much.
- Dramatic Drop: Patsy drops a glass of water when she sees the terrible, terrible sight of Mickey kissing Rosalie during a rehearsal.
- Fainting: Mickey faints when the publisher actually accepts his song and gives him a check for $100.
- Former Child Star: "Baby" Rosalie Essex, once a big Hollywood child star, now an insufferably arrogant teen who wants back in show business.
- Grand Staircase Entrance: Rosalie attempts one of these when wearing a fancy dress for her date with Mickey, but she undercuts her entrance when she trips on her heels and nearly falls.
- The Glasses Do Nothing: Judge Black admits that he doesn't even need the glasses he wears. But taking them off and cleaning them is relaxing.
- Hey, Let's Put on a Show: Mickey and all the vaudeville teens will put on a show to stay out of the trade schools and prove to their parents that they have what it takes.
- In Name Only: Although the film is nominally an adaptation of the stage show Babes in Arms, the story is quite a bit different. Additionally, the movie only uses two songs from the show, "Babes in Arms" and "Where or When"; all the other songs were different as well. (A third song from the movie, "The Lady Is a Tramp", is heard instrumentally as part of the score.)
- It Will Never Catch On: Joe Moran is dismissive of the threat posed to his career by talking films."Motion pictures, change things? Not until the Hudson catches fire."
- Minstrel Show: An entire number about this, "I'd Like to Be a Minstrel Man", featuring the gang dressed up in super-racist minstrel makeup.
- The Musical Musical: Most of the songs come from Mickey and the gang either rehearsing their songs or playing them in the show.
- No Celebrities Were Harmed: Rosalie seems like a lampoon of Shirley Temple. She says she once started in a movie called The Baby General—Temple starred in The Little Colonel.
- Clips of The Broadway Melody and The Hollywood Revue of 1929 are shown to demonstrate how talking pictures brought musicals to movie theaters.
- Mickey defends his decision to go into show business by saying "Well, Clark Gable ain't on relief."
- One rehearsal scene is really just an excuse for Rooney to do impressions of Gable and Lionel Barrymore.
- Spontaneous Choreography: In classic movie musical fashion, the gang breaks out into a spontaneous intricate number during the "Babes in Arms" sequence.
- Thunder Equals Downpour: A clap of thunder leads to immediate rain. This is a problem, since the big show is taking place in an outdoor theater.
- Time-Passes Montage: A quick one sketches out Joe and Florrie's vaudeville career during the 20s. Little Mickey eventually joins his parents in their act.
- Title Drop: "Our folks think we're babes in arms, huh?" Then follows the big "Babes in Arms" number.
- Torches and Pitchforks: A very odd positive example of this trope. After Mickey and the gang decide that they're going to put on a show of their own, they march through town singing the defiant "Babes in Arms" title track, eventually forming a mob of kids, carrying torches. Which they then use to start a giant bonfire.