Lady Britomart Undershaft summons her children to her house in the fashionable London suburb of Wilton Crescent. Stephen, the first to arrive, greets his mother in the library. Lady Britomart, a formidable woman fifty years of age, intends to discuss the family’s finances. She reminds Stephen that his sister Sarah’s fiancé, Charles Lomax, whose inheritance is still ten years off, is too brainless to support a wife. She objects less to Adolphus Cusins, a professor of Greek, who is engaged to her daughter, Barbara, a major in the Salvation Army.

Stephen timidly mentions the name of his father, Andrew Undershaft, a wealthy munitions manufacturer who is estranged from his family. Lady Britomart admits that she had invited Andrew that night to solicit financial help from him. Stephen disdains the tainted Undershaft capital, but his mother informs him that their present income comes not from her own father, whose only legacy to his family is an aristocratic name, but from Andrew. She also explains that her separation from Andrew comes from her objections to the longstanding Undershaft tradition of turning over the munitions operations to a talented foundling. Seven generations of foundlings have taken the name Andrew Undershaft and run the business, but she objects against Andrew’s disinheriting Stephen.

The girls and their fiancés arrived shortly before Andrew, who, having been away for twenty years, does not recognize his own children. Barbara’s conspicuous Salvation Army uniform turns the conversation to a discussion of personal morality. Andrew’s motto, he explains, is “unashamed,” and he candidly admits that he reaps handsome profits from “mutilation and murder.” He and Barbara challenge one another to a sort of conversion contest. Andrew agrees to visit Barbara’s shelter in the slums if she will visit his weapons factory in Middlesex.

At the squalid Salvation Army post in West Ham a few days later, two poor Cockneys, Snobby Price and Rummy Mitchens, huddle for shelter from the January cold. In low voices they discuss how they routinely make up dramatic public confessions of sins to get free meals. Jenny Hill, a worker for the army, brings in Peter Shirley, who recently lost his job. Unlike Rummy and Snobby, Shirley balks over accepting charity. A loud bully named Bill Walker swaggers in looking for his girlfriend, who recently converted. When he recognizes Jenny as the Salvationist who had helped reform his girlfriend, he angrily wrenches her arm, pulls her hair, and hits her in the face with his fist. Jenny tearfully asks God for strength and runs off.

When Barbara arrives to deal with Bill Walker, her father follows and observes. She awakens Walker’s conscience in part by mentioning Todger Fairmile, a former wrestler who is now a sergeant at the army’s Canning Town barracks. Walker offers a sovereign to ease his shame, but Barbara says that she and the army cannot be bought off and will accept nothing less than Walker’s repentant soul.

Mrs. Baines, the commissioner, comes in to report that the prospect of having to close several shelters because of a lack of money, has receded again after a sizable donation from Lord Saxmundham. Barbara is dismayed when Andrew explains that this donor is really Horace Bodger, the whiskey tycoon, whose product had ruined so many of the West Ham destitute. Andrew calls Bodger’s donation mere conscience money and, not wanting to be outdone, offers to match it with an equal gift of his own. Barbara knows that neither Bodger nor her father has reformed. She is aghast to see Mrs. Baines accept the tainted money. She slowly removes her Salvation Army badge as Undershaft, Cusins, and Mrs. Baines march off to celebrate. Bill Walker, having observed the transaction, taunts a disillusioned Barbara by saying, “What price salvation?”

The next day, in Lady Britomart’s library, Cusins reports to the family about the fiery religious meeting the day before. Amid music and hysteria, Mrs. Baines had announced the donations and the army had recorded 117 conversions. Lady Britomart settles the earlier financial question by persuading Andrew to provide support for Charles Lomax and Sarah. Andrew is resolute, however, about upholding the Undershaft tradition and disinheriting Stephen in favor of a foundling. Having seen Stephen’s lack of curiosity and intelligence, he suggests a career in politics or journalism for his son.

The entire family later travels to Andrew’s factory in Middlesex, a place that shocked them for being so clean and respectable. They marvel at the nursing home, town hall, libraries, and schools. Peter Shirley, they discover, has been given a job as a gatekeeper. Andrew proudly brags that the profits from the bloody business of warfare has eliminated from his community the worst crime of all: poverty. Its byproducts of misery, crime, and hunger are also unknown. Cusins then startles everyone by explaining that technically he himself is a foundling since his Australian parents were not legally married in England. Andrew happily offers him the position of Andrew Undershaft VIII, which he accepts.

Attention returns to Barbara. Andrew invites her to bring her gift for saving souls to his community, telling her that unlike the poor in West Ham the souls of his workers are hungry because their stomachs are full. After considering, Barbara accepts. She announces that she is over the bribe of bread and that “the way of life lies through the factory of death.”