Chip of the Flying U was Johnny Mack Brown's first western entry for 1940. Brown essays the title role of Chip Bennett, foreman of the Flying U ranch. Before the second reel has tumbled over the spools, Chip finds himself falsely accused of robbery and murder. The actual miscreants are in the employ of a band of foreign gunrunners, who speak in heavily Teutonic accents. Rest assured that Chip makes short work of these bush-league Storm Troopers before the sun sets in the West. Musical interludes are provided by a group calling themselves the Texas Rangers, even though they actually hailed from Kansas City.

It's the opening of the Cherokee strip and the Rankins are after a particular section. Frazier is also after the same section and has hired outlaws to make sure he gets it. When Jeff gives Rankin a map, the outlaws kill Rankin, steal the map, and frame Jeff for the murder. Scheduled to be hung the day of the land rush, Jeff's pal Frosty has a plan to free him.

Jeff Scott is sent to investigate problems with wagon trains attempting to make the journey to Oregon. Sam Morgan has sent his henchmen, under lead-henchman Bull Bragg, to stop the wagon trains in order to maintain control of the fur trade in the area.

Molly Taylor owns the town of Stillwell but is unaware the taxes are due as Gomer has stolen her notice. Bob Martin arrives at the same time as Molly and eventually realizes Gomer is up to something. When Gomer's henchman slips and reveals there is a letter, Bob finds it and heads for the tax collector with Gomer's men in pursuit.