The story of a little girl name Karen who was very poor and was given a pair of red shoes made of cloth to keep her feet warm in the winter. When her mother dies, she's adopted by a rich older woman who burns the shoes, saying they're ugly. Karen grows up pretty and happy with the old woman, but one day she sees a princess wearing beautiful red shoes and wants a pair just like them. When it comes time for Karen to be confirmed, she's to have a new pair of shoes. The pair she wants are red leather shoes that were maid for a count's daughter, but were too small. Karen buys them without the old woman knowing and wears them to her confirmation and gets in trouble for it. When the old woman falls ill, instead of taking care of her Karen goes to a ball and dances, but finds she can't stop dancing.

Two elderly friends trade stories of adventure with each other.