Gypsy opens in the early 1920s and closes some ten years later. It gives a kaleidoscopic picture of life in the theatre - in different American towns during that period.

Act I
The story begins in Seattle. Baby Jane and Baby Louise (Bonnie Langford and Helen Raye) are among other young "hopefuls" on the stage of a vaudeville theatre endeavoring to be selected for a children's show - Let Me Entertain You. Their domineering mother, Rose (Angela Lansbury) has only one ambition in life - to push her children the whole way in show business and naturally she is supervising the audition. At home afterwards Rose is determined to get the children, and in particular June, further and cannot understand why Some People are able to get enjoyment from the simpler things in life. With Baby June and Baby Louise, she leaves Seattle collecting some boys for a vaudeville act. While on tour, Rose meets Herbie (Barrie Ingham) - a sometime agent turned salesman whom she persuades into becoming the manager of the act (Small World) which is now called Baby June and Her Newsboys. The children grow up (played by Debbie Bowen and Zan Charisse) while still playing the same act. On Louise's birthday Herbie succeeds in booking the act onto the Orpheum Circuit - a leading chain of vaudeville theatres - through a Mr. Goldstone. Rose is serving another of her inevitable Chinese meals when she hears the news - Mr. Goldstone. Rose and Herbie's "surprise" birthday present for Louise turns out to be a lamb (Little Lamb) which in fact is part of Rose's plan for a "new" act. Herbie tries to persuade Rose to marry him and when she declines threatens to leave. However, as Rose says, You'll Never Get Away From Me and she starts to devise the "new" act Dainty June and Her Farmboys which is basically the same as the previous one. A producer offers to pay for acting lessons for June and to "make her a star" - an offer turned down by Rose. June and Louise, left alone for once, imagine the differences there would be in their lives If Momma Was Married. This is not to be and the act continues touring. Louise discovers that one of the "farmboys" - Tulsa (Andrew Norman) has secretly been working on an act for himself and a girl partner. He shows her the routine (All I Need Is The Girl) and from her reaction it is clear that Louise would like to be the "girl." Shortly afterwards Rose discovers from a note that June has married Tulsa and gone away with him - also the "farm boys" wish to leave. Undaunted, Rose decides that Louise, who has always been pushed in the background, will become the star - Everything's Coming Up Roses.

Act II
Once again the act is "revised" and this time the title is changed to Mme. Rose's Toreadorables, now with Louise as the reluctant "star." Despite bad times, Rose, Herbie and Louise agree that they will stay Together. The act is booked, in error, into a second rate burlesque theatre. This appalls Rose who wants to leave immediately. Louise persuades her to keep the act there knowing that any money coming in will be useful. Three of the strippers in the company (Valerie Walsh, Kelly Wilson, Judy Cannon) explain the finer points of their art to Louise (You Gotta Get A Gimmick) who has been dubbed "gypsy" on account of the continual traveling around the country. On the day the act is due to leave the theatre, the leading stripper is arrested. Not missing the opportunity, Rose pushes Louise into becoming a stripper. Herbie is shocked by her action and walks out leaving a saddened Rose. Louise goes on and Gypsy Rose Lee is born. The music, naturally, is Let Me Entertain You. She becomes famous and tops the bill at Minsky's - the most famous burlesque theatre at the time. Rose is still interfering and after a bitter argument with Gypsy finds herself unwanted and left alone on stage. It's time for Rose's Turn and for the first time her own ambitions and disappointments are voiced. Gypsy joins her and together they go off but it is now clear that Rose is no longer in charge.