Soon after enrolling in art classes at the School of Design, Connie Blair immediately notices a rivalry between three students.
 Roby Woodward, son of Republic Plastics owner Gard Woodward, Eric Payson, an orphan and Gard's protégé, and the shrewd and ruthless Fritz Bachman have piqued Connie’s interest.

Connie hears that the school is holding a ball and that some of the students are painting panels to decorate the ballroom. Eric's panel includes a rendering of a purple cloak that Miss Charlotte, a school trustee and patron of the ball, lent him. Reid and Renshaw agency has lent a number of valuable paintings for the school to exhibit. The mystery begins shortly after Eric shows Connie his panel, and they learn that the cloak has disappeared.

Connie and Eric attend the ball with her twin, Kit and friend Ken Cooper. The ballroom doors are opened by the chairman of the ball, Roby, to reveal a skeleton draped in the missing cloak and the defaced fairy tale panels. The panels all have been defaced by purple paint except for Eric's.

Later, while visiting Miss Charlotte, Connie learns that Mr. White, the school's janitor, is Miss Charlotte's brother when he unexpectedly appears and accuses Eric of the vandalism. She later hears that Eric and Fritz are competing for a fellowship. Then Fritz admits to jealousy because Eric is Gard's protégé, and Connie hears that Eric is the heir to Miss Charlotte's estate.

Incriminating evidence mounts against Eric when a nearly empty jar of purple paint is found in his locker, the paintings are slashed, and a knife is discovered in his raincoat. In a pivotal scene, Connie flushes out the real culprit, who is tricked into revealing their identity.