Special agent Pownall returns from Spain to to Britain, but is waylaid en route to Scotland Yard and shot dead. His briefcase is stolen and examined - in addition to various official papers there are some cuttings from a comic strip named 'Penny'.

Penny is also the name of the model who poses for the strip, drawn by artist Jonathan Blair. Penny's flatmate Molly is less than thrilled by her habit of quoting from detective fiction (Penny is a particular fan of the novels of Peter Craxton, whose female characters she finds especially convincing), as she knows from her job as secretary to Inspector Carson that it's nowhere near as glamorous as Penny thinks.

After interviewing his chauffeur, Carson believes that Pownall has been kidnapped and launches a large-scale investigation. An exhausted Molly returns home at 1am, and a conversation with Penny turns into a playful fight, ending with Penny trapping Molly in the bed unless she tells her about the Pownall case.

Pownall's body is found, and Carson opens a murder inquiry. Blair invites Penny on a sketching trip to Spain. Penny is flattered but refuses. A man arrives to discuss the Pownall business with Blair, and Penny's ears prick up. Feigning an excuse to leave early, she rushes round to Scotland Yard to tell Molly - to whom Carson is dictating a letter informing his boss Sir John Maitland that Pownall was probably killed by a gang of fugitive Nazis, and that he proposes to send another agent to Spain.

Believing Blair to be that agent, Penny decides to go to Spain after all. They check into a hotel alongside another Englishman, whom Penny fails to recognise as Inspector Carson. Penny sees Blair meeting a man outside, and follows them until she sees them disappearing into a doorway.

When they are alone together, Blair tells the man, a German named Von Leicher, that Pownall was able to retrieve the 'Penny' strip from Metzler, a wanted Nazi war criminal that Blair and Von Leicher had helped flee Europe. He insists that Von Leicher hand over a photograph of his current Nazi client's wife.

Over dinner, Blair tells Penny that he has to return home early. When paying for a cigar, the photograph falls out of his wallet, and he becomes flustered when trying to explain it to Penny.

Tipped off by a contact, Carson visits the address that Pownall was investigating and finds Von Leicher. Conceding him a cigarette, Carson is horrified to see Von Leicher bite on a poison capsule concealed in the tip. He falls to the ground, but when Carson moves closer, he overpowers him: it was a trick.

A suspicious Penny decides to visit the same address, packing a heavy omnibus edition of Peter Craxton in her bag. She inadvertently makes a sound outside the door and is discovered by Von Leicher. She sees Carson tied up, and pretends to be relaying a message from Blair saying that Carson should be kept alive. Von Leicher says that he's going to kill him instead and takes aim. Penny knocks him out with the book, and faints.

A grateful Carson explains to her that he cannot arrest Blair yet, as he's outside British jurisdiction and he needs to know exactly how he communicates with his Nazi clients through the 'Penny' strip. Penny volunteers to investigate.

At the next sketching session, Blair complains about the wig that Penny has chosen to wear. Spotting a crucial clue, she tells Carson. They investigate previous 'Penny' strips and discover that every time she wore that wig, a wanted war criminal fled Europe two days later.

Penny returns home to find Blair waiting for her: he followed her to Scotland Yard. When Carson fails to reach her by phone, he goes round to her flat, arriving in time to see Blair bundling Penny into his car. A chase ensues, Blair is stopped by a roadblock, and shot when he tries to escape.

Carson commissions an artist to illustrate the case in comic-strip form, with Penny as his well-paid model. Chiding Molly for talking too much, he suspends her from duty for a fortnight... and hopes that she has a well-earned holiday.