Setting: Paris, 1945, at the end of the Second World War.

ACT I

Adam Hochberg walks on stage and downs a cup of liquor. He sits at a piano and recounts the story of the day his friend, Jerry Mulligan, came to Paris. Just after the liberation of France, US Army Lieutenant Jerry Mulligan is struck by a mysterious girl after seeing her on the maze-like streets of Paris ("Concerto in F"). Ready to rebuild his life after the war, he deliberately misses his train home and decides to stay in Paris to nurture his passion for painting. He makes his way to a cafe/lodging house, where he meets Adam Hochberg, a fellow veteran and pianist, whose war injuries have left him with a permanent limp. Recognizing a kindred spirit, Adam helps Jerry find a place to live and helps him get started in Paris. Henri Baurel, the son of wealthy French industrialists, enters to rehearse the nightclub act he is putting together with Adam. Henri reveals his plans to run his family's American branch while becoming a nightclub star in secret, fearing his parents' disapproval of his dreams of being an entertainer. Both Henri and Jerry berate Adam for making his new song too dark when what Paris needs is light. Adam retorts that as artists, they have a duty to show the horrible things they've seen, and teases Henri about his fear of proposing to his girlfriend, whose name he will not tell Adam. The three bond in friendship as they imagine a brighter future ("I Got Rhythm").

Adam takes Jerry to the Paris ballet, where he is accompanying auditions, to sketch the dancers. Jerry bumps into headstrong American philanthropist, Milo Davenport, who, struck by his talent and good looks, invites him to a party to introduce him to gallery owners. Henri's mother, Madame Baurel, arrives with Ballet Director Maestro Z, and introduces Milo to him as a potential donor. Dancers arrive for the audition, and the audition has begun when to Jerry's shock, the mysterious girl arrives, apologizing for being late. She is told to leave, but Adam convinces her to dance in the back. As the audition continues, the girl dances beautifully, impressing the Ballet Director, Milo and both Jerry and Adam ("Second Prelude"). The girl introduces herself as Lise Dassin, and Maestro Z recognizes her as the daughter of the famed ballerina Arielle Dassin. In gratitude for his help, she gives Adam a flower and a kiss on the cheek before hurriedly leaving for her job. Milo, charmed by Lise and her mysterious demeanor, tells the maestro she will fund his season only if he commissions a piece just for Lise with a score written by Adam. She then takes it a step further, demanding it be designed by the 'noted painter' Jerry Mulligan. Helpless at her charismatic hands, the maestro agrees, except for allowing Jerry to design the ballet—he has his own stable of designers. Immediately infatuated with Lise, Adam sits down, thrilled with the prospect of writing a ballet that joins French and American culture.

Jerry interrupts Lise at her job at a perfume counter to tell her that she got the job. Lise is reserved, and but Jerry will not be dissuaded as he tries to get her to agree to meet with him at the Seine that evening, causing a ruckus in the store until he is thrown out ("I've Got Beginners' Luck"). Madame Baurel enters and congratulates Lise she is to be the prima ballerina of the Théâtre du Châtelet Ballet. It is revealed Lise lives with the Baurel family, which they have not disclosed to the Ballet in order to avoid charges of nepotism.

At the Baurel home, Henri attempts to write a letter proposing to his girlfriend, who is revealed to be Lise. Meanwhile, Lise sits down at a cafe and writes a letter to her mother; although presumed dead, she still hopes they are alive and writes a letter every day. She begs for advice: whether to marry Henri as expected, or try for true love ("The Man I Love"). Adam watches the scene from afar, falling deeper in love with Lise.

Jerry is sketching a bench at the banks of the Seine when Lise arrives for their meeting, telling him she cannot accept his friendship. He shows her an incomplete sketch of her he began after their first encounter on the street, and proposes she meet him every day so he can draw her until he gets it right. Offended, she refuses, but Jerry calms the atmosphere by saying Lise doesn't have to say anything if she doesn't want to. It becomes clear both are haunted by events during the War, and she solemnly agrees with him to put the war behind them. To lighten the mood, he declares her name too sorrowful and decides to call her Liza, telling her that in the hour they are together, they are just two crazy, happy fools down by the river ("Liza"). She agrees, only if he swears to never tell anyone. Overjoyed, he tries to kiss her, but she pushes him in the river. They both agree to meet the next day, same time, same place.

Henri is still attempting to draft his proposal letter, and his mother warns him if he doesn't do it soon, somebody else will. She implies his reluctance to propose is perhaps due to a romantic interest in men, which Henri denies, and warns him the family, vulnerable to accusations of collaboration with the Nazis, must be concerned with appearances. Lise enters with Mr. Baurel who says Henri has something to say to her. Dodging the subject, he asked her about her new position and tells her of him coming American tour. Lise tells him should he ever want a companion in America, she will accompany him gladly, and he takes this as an agreement to the proposal he has not yet made, mistaking her obvious glow of happiness for excitement about the ballet rather than for love of Jerry.

Back at the cafe, all three men rejoice over their love for Lise, eventually joining in a trio without realizing they are all singing about the same woman ("S'Wonderful"). Henri shows the other two his proposal letter, only to find he has Lise's notebook by mistake. He reads the letter to her mother about her doubts over doing what is expected of her, marrying Henri and following her heart. Stricken, he nonetheless finds a glimmer of hope in the letter. Adam offers to console him with a drink while Jerry heads over to Milo's party.

Jerry arrives at Milo's apartment to discover there was no party, and Milo has invited him on a date on false pretenses ("Shall We Dance?"). Initially annoyed, Jerry relents after Milo gives him constructive criticism on his art and takes him to meet various gallery representatives, and they begin a casual relationship.

Over the next week, Adam and Lise work on the new ballet, and struggle with the material. Milo continuously brings Jerry's designs in and they are routinely rejected. Milo and Jerry embark on a trek of the Parisian art world, exploding with new life and post-war energy as Milo falls in love with him. Jerry's designs are finally accepted, but the ballet continues to run into many problems, and Lise and Jerry find solace in their short daily meetings. Milo and Jerry go to a costume party, and Jerry is shocked to discover Lise there with Henri. Jerry realizes Lise is engaged to his friend and, in a fit of rage, he removes both his and Milo's masks, and with Lise watching, kisses her ("Second Rhapsody/Cuban Overture").

ACT II

Adam is commissioned by the Baurels to play at one of their parties, not knowing his connection to Henri. Jerry is brought as Milo's plus one, and, in an attempt to cover up his secret nightclub act, Henri denies knowing them, arousing his parents' suspicions. After learning the party is a benefit for the ballet and dancers will be there, Jerry tries and fails to leave for the fear of confronting Lise. After seeing Lise is not among the dancers, he laughs in relief, causing a stir among the guests which eventually turns into a wild dance number ("Fidgety Feet"). After the performance, he discovers Lise is indeed there as a guest of honor. The Baurels, surprised to find both enjoy jazz, ask Milo for a recommendation for a nightclub, and when Milo asks Jerry, he recommends the nightclub where Henri and Adam are booked to perform. The Baurels announce Lise and Henri's engagement, crushing both Adam and Jerry, who lashes out at Milo and storms into the garden. Henri asks Milo to dance to comfort her, and they recognize each other as kindred spirits.

Lise follows him out into the garden. Jerry confronts her. Lise cannot lie and says she loves him, but cannot be with him because she is beholden to Henri for a reason she refuses to disclose. Jerry questions Henri's love for her and begs her to meet him again. Lise tells him she does not have the luxury of love and runs away because "life is not like your American movies." Jerry is left in despair. It is revealed Milo, Adam and Henri have been watching the altercation the whole time.

Back at their respective homes, they all act as if nothing has happened. In parallel conversations, Milo and Henri ask Jerry and Lise if they have anything to tell them. Dodging the question, they ask if they're worried of what the public thinks of them. They respond they don't care as long as they're in love ("Who Cares?/For You, For Me, For Evermore"). Henri pledges his love for Lise, but Jerry decides to be honest with Milo and break things off. Although she has fallen in love with him, she thanks him for being honest and they end their relationship amicably. Adam and Milo reflect on the love around them and wonder why there is no love for them ("But Not For Me").

In a nightclub in Montparnasse on one of their last shows, Adam and Henri get ready for a show. Adam begs Henri to let Lise stay in Paris and accuses him of being a coward both during the war and afterwards. Henri, furious, admits the truth: Lise is beholden to Henri because he and his family saved her life during the occupation. She was the daughter of the Baurel's Jewish butler, and she was entrusted to their care after her parents were arrested by the Nazis. Henri threw himself into the Resistance, all of them risking their lives for her, and have kept this secret due to the disruption this would cause their social status in the fragile post-war world. Adam asks if that means Lise has to throw away her life to pay Henri back when neither of them really love each other, and begs him to find the courage he had during the war and free Lise to make her own decisions. Before they can say more, they are called to places.

Jerry sees Lise at the nightclub and tells her that he and Milo are through and begs her to tell him what obligations she has to Henri, but Henri's act starts. Henri's act begins and he is stricken with nerves, but Adam encourages him to remember his dream, and he fantasizes of performing an elegant number in Radio City Music Hall ("Stairway to Paradise"). His act ends triumphantly. Unfortunately, Milo and his parents catch him, the nightclub being the one Jerry recommended (not knowing the recommendation was for the Baurels.) Mme Baurel berates him for shaming the family name, but Mr. Baurel is proud and in awe of his son's talent, and she capitulates. Lise, however, is angry at Jerry for accidentally exposing Henri and leaves. Jerry tries to run after her and accidentally knocks Adam to the ground. When he tries to help him up, Henri stops him, furious for disrupting his relationship with Lise. Jerry accuses him of being a coward. Henri punches him and tells him whatever he may think of him, Lise is what he has devoted his life to. To clear the air, Adam tells Jerry of Henri's involvement in the Resistance and Lise's past. Jerry understands, but is determined to keep fighting for love and tells Henri if he chooses duty over love, they are all doomed. Lise, who has overheard the confrontation, comes back in, telling Henri to take her home. Jerry pleads with her, but she departs, leaving him heartbroken. Adam has a flash of insight: if life is dark, then it is an artist's duty to celebrate and bring love back into life. He feverishly revises the score for the Ballet, turning it into a celebration of life.

On opening night at the Ballet, Jerry shifts around nervously outside Lise's dressing room, a scroll in his hand. Milo, seeing his indecision, offers to deliver it for him. Lise opens the scroll to find it is his drawing of her, finally complete. Milo advises her although Jerry was never serious about her, he did teach her one thing: money could not buy love, which is one of a kind. Lise thanks her, but confesses she knows the Ballet will fail; she is so upset that she does not feel any passion onstage. Milo advises her to think of someone who made her feel that passion as she dances. Lise clutches Jerry's drawing tight as places are called. The Ballet begins, and as it progresses, Lise imagines her partner has become Jerry, and they perform a magnificent pas de deux. The Ballet ends with Lise triumphant, having become a bona fide star ("An American in Paris").

After the curtain call, Jerry goes on to congratulate Lise and apologizes. Lise tells him not to, she couldn't have danced like that if she didn't love him. Milo asks Henri if he feels alright. He admits he cannot tell if his love for Lise is out of duty or passion and asks to take a drive with Lise. Milo approves, and advises him to call her the next day. Lise asks for one moment and approaches Adam. She gives Adam a rose out of her bouquet, a gesture usually done by an etoile to her pas de deux partner, and kisses him good bye. He takes her aside and warns she is making a mistake by doing her duty. Love is a one time thing and she should follow her heart. She leaves, and Audience members go up to congratulate Adam. He has been praised in every review. It is then he realizes his love for Lise isn't for her, but for the light she brings into the world. He rejoices he got the chance to capture her in music and vows to do good in the world. The three men vow to always remember Lise and thank her for how she has changed their lives ("They Can't Take That Away From Me").

Jerry sits alone by the Seine. Lise appears. She has decided to follow her heart. They dance together and walk off into the Paris night ("Epilogue").