The novel by Bradford Ropes was adapted into this backstage musical about a chorus girl thrust into stardom.
Abner Dillon (Guy Kibbee) is financing the show Pretty Lady because of star Dorothy Brock (Bebe Daniels). Veteran director Julian Marsh (Warner Baxter) is ill and warned by his doctor, but he needs the money. Julian picks forty girls by looking at their legs and then promises them five weeks of hard rehearsals. Dorothy is seeing Pat Denning (George Brent) secretly, though this threatens the funding from Abner. Pat feels bad about sneaking around and accepting money from Dorothy. At rehearsal Dorothy sings, "You're Getting To Be a Habit With Me." Billy (Dick Powell) meets and helps newcomer Peggy Sawyer (Ruby Keeler). When Peggy faints, she meets Pat. Dorothy goes to dinner with Abner, and Pat is warned to stay away from Dorothy. He goes to Peggy's room, and her moralistic landlady throws them out; so they go to his place. Meanwhile Julian is driving the dancers hard. Dorothy visits Pat and tells him she does not want to see him for a while.
The show is opening in Philadelphia, and Billy makes a date with Peggy. Dorothy sees Pat with Peggy and gets upset at a cast party, quarrels with the drunk Abner, and drives them all out of her apartment. Dorothy calls Pat and asks him to come over. Abner tells Julian that Dorothy is out of the show, but the director assuages his anger. Peggy sees Pat go into Dorothy's room and goes to warn him because detectives saw him. Dorothy hurts her ankle, and Julian cancels the show. Abner gets Anytime Annie (Ginger Rogers) to fill in, but she recommends Peggy. Julian works with Peggy all day and announces the show will go on. Billy kisses Peggy, and Dorothy on crutches encourages her and tells her she is happy to be marrying Pat. Julian tells Peggy they are all depending on her and that she must go out there and "come back a star."
In the show Peggy sings "Shuffle Off to Buffalo," about honeymooning at Niagara Falls, and then Billy sings "I'm Young and Healthy" to several pretty chorus girls. Peggy dances and sings "42nd Street" where the underworld can meet the elite. In the final scene Julian listens to the audience leaving as they praise the new star Peggy and cynically comment he'll try to take the credit.
This ground-breaking musical with Busby Berkeley choreography contains sexual innuendo prior to the censorship crackdown. An unknown suddenly becoming a star is the archetypal show business Cinderella theme.