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Billy the Kid and his pal Jeff help their friend Fuzzy Jones escape from jail, and the trio heads for Paradise Valley, where they find the Paradise Land Development Company, ran by Matt Brawley and Jack Saunders, is somewhat less than honest in their dealings with the homesteaders. They devise a plan to cause a split between Brawley and Saunders.
When Sheriff Hanley sends for Billy and his pals, they arrive to find him murdered and Ed Slade temporary Sheriff.
Stanton breaks Billy and his two friends Fuzzy and Jeff out of jail. He wants them free so three of his men can impersonate them for the robberies and murders he has planned.
Knowing the Army is arriving to establish a post. Doc Hagan and his gang and the crooked Sheriff are trying to drive the ranchers off the land. When the gang wound a rancher, the Doc finishes him off with his needle. Running from the law again, Billy and his pals arrive and take up the ranchers fight. But when Billy's pal Jeff is wounded, Fuzzy unknowningly takes him to Doc Hagan.
Billy the Kid and his pals Jeff Travis and Fuzzy Jones are arrested and brought to Fort Culver, where Billy is amazed to discover that he and the post commander Lieutenant Ted Morrison, are exact doubles.
Billy and his pals, on the run from the law again, travel to Sage Valley where Billy is made Sheriff. The local outlaw gang is run by Kansas Ed who closely resembles Billy. Ed captures Billy and changing clothes with him, now plans to run the town as Sheriff.
Billy the Kid and his pal Fuzzy escape from the Marshal and find themselves in the ghost town of Laramy. The city was abandoned because of Sykes and his gang, who are in search of a gold mine.
Billy the Kid has been wrongfully arrested for robbing a train. In order to prove his innocence, the Kid breaks out of jail and hits the trail to search for the real robbers. Along the way, he discovers that an outlaw band has been impersonating upstanding ranchers.
Billy joins an outlaw band led by woman to clear his name of their crimes, which are being blamed on him.
Billy the Kid and Fuzzy Jones are on their way out of Arizona being chased by some riders who hope to cash in on the reward money for their capture. They are warned in time by Ed Dawson, but Ed is wounded in the getaway. They get a doctor to attend to Ed. The latter tells them there is a range war in progress across the border and that he is looking for men to help make a cattle drive to the rail junction.