In the 1920's, the Ziegfeld Follies were the biggest shows on Broadway, and every young woman in New York dreamed of becoming a Ziegfeld Girl. Being discovered by Zegfield opened the door to success, but not everyone got through without trouble. Shiela Regan (Lana Turner) is an elevator operator in love with her boyfrield Gil (Jimmy Stewart) when she's noticed by Ziegfeld's assistant. Sue Gallagher (Judy Garland) is a 19-year old vaudville vet who gets a chance to audition her singing talents. Sandra Kolter (Hedy Lamarr) is a dark European beauty who get noticed backstage while her husband is auditioning for the orchestra. All three young women are caught in a whirl of success, opportunity and temptation after making it into the Follies.
Shiela quickly get noticed by a rich society playboy, and is soon swept off her feet by the lavish lifestyle she has access to. Confronted by Gil, she chooses fine furs over his love, and he storms out. She's also discovered a taste for fine wine, and begins to drown her sorrows with it.
Young Sue Gallagher has a chance to make it big with the Follies, but is held back by her commitment to her father, a vaudville trooper of the old school. His style of performing is outdated, and threatens to ruin Sue's chances of success. She never wants to hurt him, but she'll have to choose soon.
Sandra's husband can't handle the fact that she's getting paid to walk around in skimpy costumes for the pleasure of other men, while he can't get a job of any kind. They argue, and he too walks out. Soon, she is also swept up in the social life of a Follies girl, and begins to spend a lot of time with her married co-star. The gossip pages are full of titillating stories about both Sandra and Shiela's antics.
Meanwhile, trying to make some big dough to impress Shiela, Gil has fallen in with bootleggers. Traveling with the show to Palm Beach, Shiela has become completely entangled in the life of a show girl. Drinking and gambling, she's more often drunk than sober, and has alienated everyone around her. Bumping into Gil at a casino, she tries to show herself that she still can still have any man she wants, even him. Gil spurns her advances and walks off with his gangster friends, while her playboy boyfriend realizes that Sheila's no longer the girl he was first attracted to. Her world has begun to spiral out of control, and she's on the verge of losing everything.
Sue finally gets her big chance to show what her voice can do, but her father's insistance on pounding out the song vaudville-style almost gets her thrown out. She finally does it her way, to the wonder of everyone, and becomes Ziegfeld's new headliner. Her father is forced to realize that he's been wrong, and goes on the road without her.
Sandra begins to realize that she doesn't want to be a footnote in the society gossip pages, and after a soul-searching meeting with her lover's wife, she manages to reconcile with her own husband. She's learned the value of his love, and he's learned that he has to have faith in her.
Shiela has fallen hard and fast, losing first Gil, then the rich playboy, and finally having to pawn all her furs and jewelery. Gil's been caught running liquor, and has been thrown in prison. Visiting him there, he will still have nothing to do with her. She's forced to frequent seedy dives to get a drink, and finally has to accept the advances of men she once spurned. Collapsing in a drunken haze, she gets fired from the Follies. Shiela is brought back to her family's home to recuperate, but the hard life she's lived the last few years has taken it's toll. Her heart is weak, and the doctor is not hopeful.
Sue's success as the Follies top act gives her the chance to get her father into the show, where he's a suprise hit. Happy to be working with him again, the life of a Ziegfeld girl has given her everything she ever dreamed of. Sandra is still in the show too, and with her husband in the orchestra, she's happy to have survived the temptation and dangers she faced. That leaves only Shiela, who has fallen victim to the worst that a showgirl's life has to offer. Laying weakly in bed, Gil pays her a suprise visit. Having served his time in prison, he comes back to her, and they are both forced to realize they still love each other. After he leaves, Shiela looks at the paper. The headline is all about Sue Gallagher's big debut with the Follies, and Shiela becomes determined to be there one last time.
The show is a big hit, and Shiela watches from the balcony. A sudden pain hits her and she rises to leave, but at the top of the stairs she hears the old music again, and manages to glide down the steps, head held high just like the old days. For one last moment, she is a Ziegfeld girl again. At the bottom of the stairs she falters, gasps, and falls to the floor.