It is 1933 on a street in New York as the Prologue takes place. Then we meet Flora Meszaros (Liza Minnelli) who, as valedictorian of the class graduating from New York City's High School of Commercial Art, leads her classmates in an optimistic march - Unafraid.

Two years later, while applying for a job as a fashion illustrator at Garrett and Mellicks Department Store, Flora meets a strangely intense young artist named Harry Toukarian (Bob Dishy). Her filling out the employment application leads her, along with the other aspirants, to sing All I Need (Is One Good Break).

Later that day Flora and Harry get to know each other better in a duet entitled Not Every Day Of The Week.

Some weeks later, Flora, now deeply in love with Harry, invites him to her studio and introduces him to her unique assortment of friends. Later, when they are alone, he surprises her by pulling out an application to join the Communist Party; he convinces her to Sign Here.

At a Party meeting Flora meets Harry's comrades and hears Comrade Ada (Mary Louise Wilson), an ardent member of the Party, recount her dedicated activities in pursuit of a better world in The Flame.

Flora returns to her studio to find she has been summoned for an interview at Garrett and Mellicks Department Store. After she rushes off, we hear The Lady (Dortha Duckworth), one of her friends who rents space in Flora's studio, and Cowboy Bronco Smallwood (James Cresson) rehearsing for the Major Bowes Amateur Hour with their rendition of Palomino Pal.

In Mr. Stanley's office at Garrett and Mellicks, Flora is offered a job for the immense sum of thirty dollars a week. Stunned by her great good fortune, she sings A Quiet Thing.

While waiting for Flora to return to the studio from her interview, Harry practices his elocution. A stammerer, he emulates his idol Demosthenes by declaiming with a mouthful of pebbles. Flora understands every muffled syllable, but hesitates to go with him to his apartment and become his "loving comrade." He mumbles his frustrations to Flora in the duet Hello, Waves.

That night after a Communist rally in Union Square, Harry once again details his yearning for Flora. He shambles off to his apartment mumbling to himself. Flora decides to follow him, singing Dear Love as she wends her way to his door.

Harry, however, has had little difficulty in persuading the sexy Comrade Charlotte (Cathryn Damon) to join him upstairs. Downing a goodly belt of "fortified sherry," she exhorts him to Express Yourself. Flora arrives unexpectedly and, to her horror, discovers Charlotte hiding in the bathroom. Charlotte is equally upset and determines to strike back at Flora.

In Central Park, meanwhile, romance triumphs over Marx as an unlikely pair, the Cowboy and Comrade Ada, warm to each other with Knock Knock.

At Garrett and Mellicks, Flora faces Mr. Stanley's boss, Mr. Rearson, who has found copies of the Daily Worker in her locker. Flora realizes that Charlotte is the culprit, but she admits to membership in the Party and is summarily fired. In a burst of irony she resolves to Sing Happy.

At the studio, Flora refuses to forgive Harry or the Communist Party which has caused her to be fired. Harry asks her to marry him. She is touched but adamant and hands him her membership card. Later Mr. Stanley (Robert Kaye) arrives to console Flora. He explains that someone called and said that someone else had planted the Daily Workers in her locker. The call came from someone who stammered. Flora is confused now as she is sure that Harry is the one who cleared her, but Mr. Weiss (Joe E. Marks) and her studio friends convince her that her actions have been correct in You Are You. In Mr. Weiss's words, Comrade Harry and the Party have become "Chapter One in the life of a young girl."