Shemp is suffering from an enlarged vein in his leg, and fears that it will lead to amputation. His doctor, however, advises that a few weeks in the Old West will cure him. Upon arrival in a somewhat lawless town, the boys befriend the ruthless Doc Barker. Barker listens to Shemp's story about his bad leg, mistaking "the biggest vein you ever saw" for a gold-bearing vein worth millions. The Stooges take a liking to Barker, but are later informed by the beautiful Nell that he is an outlaw who is holding her two sisters hostage in the basement of the saloon. The boys hatch a plan to obtain the prison cell keys from Barker's coat. Shemp joins the outlaw in a game of poker, while Moe and Larry prepare beverages for the card players. The two find every possible deadly chemical they can to add to their volatile Mickey Finn, from Old Homicide to paint. They also prepare a sarsaparilla for Shemp to make sure their pal does not indulge in the suicidal drink. Barker downs the concoction, and screams for water. Shemp grabs a nearby fire hose and sprays the entire gang, soaking them. Moe and Larry quickly grab Barker's coat and get the cell keys to Nell, who frees her sisters. Barker ends up dying of heart failure at the Poker table, and his irate gang throw Larry in the cell with plans to kill him at sunrise. Moe and Shemp attempt to free Larry using every tool they can find, while the girls ride for help. After freeing Larry, the trio stumble upon a suitcase full of old, Southern-style clothing. They then quickly change outfits to disguise themselves from Barker's gang, but a gang member recognizes them. The boys flee the saloon, and scurry away to hideout outside of town. Just as they are cornered by Barker's gang, Shemp takes off his gun belt, and, now serving as an ad hocammunition belt, puts it through a meat grinder. The increased firepower scares the gang away, and the Stooges emerge victorious.
Pals and Gals is a reworking of 1947's Out West, using ample stock footage. In addition, scenes of the Stooges escaping the saloon via horseback were recycled from 1937's Goofs and Saddles. Insert shots needed to bridge old footage were filmed on April 28, 1953. In order to advance the new plot and connect recycled scenes, the character of Doc Barker is killed off by dying of heart failure after consuming Moe's Mickey Finn. Due to careless editing of stock footage, Barker accidentally reappears a few moments later while Nell is singing in the bar. So that the pre-chase scenes would match up with the chase from Goofs and Saddles, Stanley Blystone, who had played the antagonist Longhorn Pete in Goofs and Saddles, was asked to don a costume to protray one of the gang members in Pals and Gals; That way there would not be such a blatant mismatch when Blystone is seen yelling from the window after the Stooges jump into the wagon and flee. Blystone had appeared as a United States Cavalry Colonel in Out West, a plot device not carried over to Pals and Gals. Director Jules White, a previous film editor, often took great care in making such matches; he used a moviola on the set to make sure new footage matched old. Pals and Gals marks the final appearance of longtime Blackie Whiteford. the background actor was his final appearance in short film.