In the dining room of the Savoy Hotel, on the eve of his summer holiday, Chips meets Katherine Bridges, a music hall soubrette.

Dissatisfied with her career and social circle, and depressed by her romantic entanglements, Katherine sets sail on a Mediterranean cruise and by chance is reunited with Chips in Paestum, where the pair spend a nice day together.

Before he can give Katherine the news, she is killed by a German V-1 flying bomb while entertaining the troops at a local Royal Air Force base.

[2] In 1964, trade magazine advertisements announced that Julie Andrews, fresh from her success in Mary Poppins, was to star in a Mr. Chips musical opposite Rex Harrison, with Vincente Minnelli as director, but nothing came of the project.

[citation needed] Champion eventually left the project,[5] and the film ultimately became the first-time directorial effort of choreographer Herbert Ross.

Additionally, Rattigan made the character of Katherine Bridges a music hall soubrette and has her get killed by a V-1 flying bomb after being married to Chips for two decades, rather than dying in childbirth after a much shorter marriage.

[8][9] After the film's initial roadshow bookings, and before it was released in neighborhood theaters, many of the musical numbers were deleted, even though many of them were instrumental in explaining the characters' inner thoughts and emotions.

Having been forced to abandon his usual mechanical flamboyance, he gives Chips an air of genuine, if seedy, grandeur that shines through dozens of make-up changes… Miss Clark is a fine rock singer with the quality of a somewhat tough Julie Andrews (which I like and is not to be confused with Miss Andrews's steely cool)… The film is the first directorial effort of Herbert Ross…the sort of director who depends heavily on the use of the zoom, the boom and the helicopter, which gives the movie the contradictory look of a mod-Victorian valentine…[he] has handled the musical sequences…more or less as soliloquies.

O'Toole talks his with such charm that I almost suspected he was lip-syncing Rex Harrison's voice, and Miss Clark belts hers in good, modified Streisand style.

"[9] Roger Ebert of the Chicago Sun-Times observed: "Goodbye, Mr. Chips uses its budget quietly, with good taste, and succeeds in being a big movie without being a gross one.

By modernizing the action, Rattigan has made it possible for the movie to mirror changes in the English class structure during the two decades when it was most obviously becoming obsolete… As the schoolmaster and his wife, Peter O'Toole and Petula Clark are exactly right.

Peter O'Toole is a prim and angular Chips who wears a look of permanent insecurity; Miss Clark is a soft, sweet-smelling, dimpled doughnut with powdery cheeks and witty anxiety, like a new Jean Arthur.

Together they are perfect counterparts… Goodbye, Mr. Chips is, I'm afraid, very square indeed, but thanks to an idyllic cast and a magnificent director, there is so much love and beauty in it that it made my heart stop with joy.

"[7] A reviewer for the British Channel 4 felt that "the main problem with turning the film into a musical is that the songs lack the emotion that the story really needs… That said, O'Toole is superb as Chips and Clark charming as the woman who dramatically changes his life.