Time: The present
Place: An outer-borough of New York

Avenue Q has many story threads - for brevity's sake, and to preserve an element of surprise, the following is only the main thrust of the story as it relates to the songs.

Act I
After The Avenue Q Theme, we meet Princeton, in a graduation cap and gown, who wonders What Do You Do With A B.A. In English?

On a dilapidated street in an outer-outer borough of the city, Brian and Kate Monster both agree that It Sucks To Be Me: he's unemployed; she's single. Joining in the chorus are embattled roommates Nicky and Rod; Brian's Japanese fiancée, Christmas Eve; and finally Gary Coleman - yes, that Gary Coleman - who's the neighborhood's super. He helps new arrival Princeton get an apartment.

Nicky swears he'd stand by Rod If You Were Gay, though Rod protests he's not. Meanwhile, Princeton decides to find his Purpose. He runs into Kate Monster, who declares that her purpose is to open a school devoted to Monsters. Princeton makes a racist statement about Monsters, and he and Kate explore the notion that Everyone's A Little Bit Racist.

At her teaching job, Kate is assigned an important lesson. She decides to teach the kids about the Internet, but neighbor Trekkie Monster upstages her by insisting that The Internet Is For Porn.

Princeton makes Kate a Mix Tape and asks her on a date that night. They go to a club, where Brian warms up the crowd - I'm Not Wearing Underwear Today. Chanteuse Lucy The Slut then sings that she can make anyone feel Special. The troublemaking Bad Idea Bears get Kate and Princeton drunk and send them home, where they "get it on" noisily. Listening in, Gary Coleman and the Bears agree that You Can Be As Loud As The Hell You Want (When You're Makin' Love).

Meanwhile, a sleeping Rod dreams that Nicky is in love with him, exulting that Fantasies Come True; in real life, Kate expresses her fondness for Princeton and he gives her a lucky penny.

Brian and Christmas Eve get married. At the reception, Nicky suggests that Rod is gay. Rod overhears and defensively brags about My Girlfriend, Who Lives In Canada. He kicks Nicky out of the apartment. Princeton realizes he's forgotten his purpose in life, and he breaks up with Kate, who recognizes There's A Fine, Fine Line between love and a waste of time.

Act II
A few weeks later, Princeton is in a funk. Brian and the others show him There Is Life Outside Your Apartment. In the city, Princeton hooks up with Lucy. Kate Monster sees them together and gets upset, Christmas Eve helpfully explains the hatred that arises The More You Ruv Someone. Kate writes Princeton a note asking him to meet her on top of the Empire State building. Lucy reads the note and destroys it.

Meanwhile, Nicky has no place to live, and asks Gary for help. Gary explains the concept of Schadenfreude, which means "taking pleasure in other people's pain."

Kate waits in vain for Princeton atop the Empire State Building. She throws his lucky penny off the side, and it lands in Lucy's skull 102 stories below. Princeton, Nicky, and Kate all remember a simpler time - I Wish I Could Go Back To College.

Meeting homeless Nicky on the street, Princeton decides to help Kate open her Monster school, and they enlist others to help raise money - The Money Song. Falling very short, they turn to Trekkie Monster, who saves the day - School For Monsters/The Money Song (Reprise).

A thrilled Kate gets her school. Rod appears and comes triumphantly out of the closet. He asks Nicky to move back in, and in return Nicky brings out someone who looks just like himself: a boyfriend he found for Rod! Meanwhile Kate, touched by Princeton's generous action, agrees to try a relationship again - There's A Fine, Fine Line (Reprise).

A newcomer to the street (What Do You Do With A B.A. In English? - Reprise) makes Princeton finally realize his purpose: to put on a show about struggling through your twenties! Everyone agrees that it's a bad idea. Seeing his sadness and frustration, his friends console him, teaching him that everything in life, good and bad, is only For Now.