Act 1
Backstage at the Zangler Theater in New York in the 1930s, the last performance of the Zangler Follies is wrapping up for the season, and Tess, the Dance Director, is dodging the advances of the married Bela Zangler. Bobby Child, the rich son of a banking family, is backstage hoping for an audition with Mr. Zangler. Bobby performs "K-ra-zy for You," but fails to impress Zangler, having landed on Zangler's foot during the final flourish of his dance routine. Dejected, Bobby heads outside.

Bobby is met by Irene, the wealthy woman to whom he has been engaged for five years, and then by his mother, who demands that Bobby take over her piece of the banking business. Bobby is told to go to Deadrock, Nevada, to foreclose on a rundown theater. As the women argue over him, Bobby imagines himself dancing with the Follies Girls and joins them in a rousing rendition of "I Can't Be Bothered Now." Brought back to reality, Bobby decides to escape to Nevada.

When Bobby arrives in Deadrock, it's clear that the gold mining town has seen better days. The men, who are cowboys, sing "Bidin' My Time" in a long, slow drawl. Everett Baker receives a letter from New York warning of the bank foreclosing on the Gaiety Theater. The only woman left in this forlorn town is Everett's daughter, the spunky Polly Baker, who vows to get even with Bobby Child if she ever meets him.

Lank Hawkins, proprietor of the town's saloon, argues with Everett, trying to convince Everett to let him buy the theater before the bank takes it. The stubborn old man refuses to give up the theater due to his memories of Polly's mother being the star of all the theater's old shows.

Bobby enters the town almost dying of thirst, and falls in love with Polly at first sight, not realizing who she is, and expresses his excitement in "Things Are Looking Up." Lank isn't pleased to see a rival for Polly's affections.

Bobby finds himself in quite a bind. If he forecloses on the theater he will lose the girl of his dreams. Inspired, he comes up with the idea of putting on a show to pay off the mortgage. Polly agrees to this plan until she finds out who he is and suspects a trick. Bobby and Polly are both heartbroken, but Bobby decides to put on the show anyway... disguised as Mr. Zangler. Polly, deeply hurt, expresses her loneliness in "Someone to Watch Over Me."

A few days later, ten Follies Girls on vacation from The Zangler Follies appear like a mirage in the desert. Bobby has asked them to help stage a spectacular show in Deadrock. When the men of Deadrock see the girls, the sleepy town becomes very lively. Lank Hawkins continues to express extreme dislike for the show, threatening to shoot Bobby. Rehearsals for the show aren't going well and the cowboys in particular are terrible dancers. Bobby changes all that in the course of one rehearsal with the song "Slap That Bass." Spirits are now at a high point. Meanwhile, to Bobby's dismay, Irene arrives, threatening to expose Bobby's charade, and Polly has fallen in love with Bobby's impersonation of Zangler. She expresses her love for Zangler with the song "Embraceable You."

Opening night arrives, with everyone's hopes high ("Tonight's the Night!"). Sadly, everyone is disappointed to find that the only people to arrive at the show are Eugene and Patricia Fodor, British tourists writing a guidebook on the American West. What starts out as a disappointment changes into the realization that the show has galvanized the once sleepy town. They celebrate with a spirited rendition of "I Got Rhythm" while the real Zangler stumbles unnoticed into the town, almost dehydrated, and collapses just as the scene ends.

Act 2
In Lank's saloon Bobby is professing his love to Polly. Unfortunately, she is still in love with the man who she thinks is Zangler. Bobby is about to convince Polly that he has been impersonating "Zangler" when the real Zangler stumbles into the saloon looking for Tess.

Zangler finds Tess, but refuses her request to produce the show. Tess storms off, and Zangler, now drunk after being disgusted by the town, bemoans his fate. Bobby, dressed like Zangler, reels in to drown his sorrow over losing Polly. Drunk and depressed, the two men act as mirror images of each other, and lament their lost loves in "What Causes That."

The next morning, Polly sees the two Zanglers and realizes what has happened. She slaps Bobby and leaves in a huff, while the townsfolk prepare for a meeting at the theater to discuss what to do with the show. Irene comes to Bobby in one final attempt to make him go back to New York with her, but Bobby rejects her, and states his love for Polly. Immensely frustrated with Bobby, Irene seduces Lank in "Naughty Baby."

The townsfolk are all now gathered at the theater. Bobby is all for trying the show again, while Polly thinks they should abandon the venture. The Fodors counsel the dejected townspeople to keep a "Stiff Upper Lip," which includes a parody of the barricade scene from Les Misérables, but by the end of the song only Polly, Everett, Bobby, and Tess still think the show should continue.

Everyone but Bobby and Polly leave the theater. Bobby prepares to leave for New York, professing that his memories of Polly will never fade in "They Can't Take That Away from Me." Polly realizes, too late, that she does love Bobby, and after he leaves, laments her loss in "But Not For Me."

Meanwhile, Bela Zangler decides to put on the show as a favor to Tess; the two seem to be in love once more. Although he had been planning to cast Bobby as the lead, he makes Polly the star of the show after learning that Bobby has left for New York.

Six weeks later, Bobby is still thinking of Deadrock as he works in his mother's bank. For his birthday, Mrs. Child gives him the Zangler theater (Zangler has used all his money on the show in Deadrock). While initially ecstatic, Bobby realizes that his love for Polly is worth more in "Nice Work if You Can Get It," and leaves with Mrs. Child for Deadrock to pursue Polly.

Meanwhile, Polly has decided to leave for New York to look for Bobby, who arrives in Deadrock just after she leaves. After learning that Polly has left to find him, he leaves the stage to "wash up" before driving back to New York to catch her. Bobby's mother and Irene (who is now married to Lank) notice each other, and start an argument. Everett notices Mrs. Child, and falls head-over-heels in love with her, as shown in a reprise of "Things Are Looking Up." His affections are reciprocated, and immediately afterwards, Polly reenters with Custus, one of the cowboys. Custus was trying to give Polly a ride to the station, but his car ran out of gas, and Polly has missed the train to New York. Together the townspeople concoct a plan, and Polly and Bobby are finally reunited in the "Finale."