Mercy Merrick has been tricked into the tragic life of a woman of the streets, after a childhood with strolling players and gypsies. She struggles to rehabilitate herself, inspired by a sermon given by a young clergyman, Julian Gray, in the refuge where she was living. Working as a volunteer nurse in the Franco-German war of 1870, she meets Grace Roseberry, a penniless but well-connected and respectable young woman. When Grace is apparently killed by a German shell, Mercy assumes her identity. Armed with a letter of introduction to Grace's relation by marriage, Lady Janet Roy, she is helped to reach England by Horace Holmcroft, a war correspondent and acquaintance of Lady Roy. Mercy is warmly welcomed and becomes her companion and adopted daughter. With Lady Roy's approval, she becomes engaged to Horace.

Grace is not dead, however, since her life has been saved by a German brain surgeon. She returns to England and is introduced to Lady Roy by Julian Gray, but lacking the evidence to back up her claim, is rejected as an imposter. Mercy is about to confess but is antagonised by Grace's vengeful, unforgiving nature. Grace is deemed insane and is about to be confined in an asylum when Mercy once more comes under the influence of Julian Gray, who falls in love with her, and she finally admits her deception. Horace breaks off their engagement while Grace accepts £500 as a bribe for her silence and leaves for Canada. Lady Roy, genuinely fond of Mercy, tries unsuccessfully to persuade her to remain as companion. At first Mercy refuses to marry Julian, in order not to ruin his career and social position. However, he becomes seriously ill and when he recovers Mercy finally agrees to marry him. Rejected by society, they sail to the New World to start life afresh.