The musical begins in the seedy Kit Kat Klub, in Berlin. The Emcee begins the show, and introduces the other people in the club, including the star attraction, an English woman named Sally Bowles (Willkommen, bienvenue, welcome).

Sitting alone in a train carriage heading towards Berlin is Clifford Bradshaw, an American novelist, hoping to gain inspiration from the famous city, to write his new novel. Another man enters the carriage. This is Ernst Ludwig, a native of Berlin. He and Cliff talk, and when they cross the border, we find out that Ernst has smuggled goods in one of his briefcases. Ernst recommends a place to stay in Berlin to Cliff, at Fraulein Schneider's place and Cliff agrees to give Ernst English lessons.

Cliff decides to take Ernst's advice and rent a room from Fraulein Schneider. Although she haggles, Cliff states that he can afford very little, and they agree on a room and price of fifty marks.(So what)

While she is showing him the room, Fraulein Kost who lives across the hall enters. Fraulein Schneider doesn't want her to bother Cliff, but he insists that it's alright. Herr Schultz, a fruit store owner, also comes by to visit Fraulein Schneider. They then leave Cliff alone to work on his novel, while they go celebrate New Year's Eve. But instead of working, he decides to go to the Kit Kat Klub, where Sally performs a number with the Kit Kat Girls. (Don't tell Mama).

After the song, Sally calls Cliff on a telephone at his table, and asks him to have a drink with her later. One of the Kit Kat Boys, Bobby, who Cliff had previously met in London, also calls him and invites him backstage.

Backstage, Max, the owner of the Kit Kat Klub meets with Sally in the dressing room and fires her. After he leaves, Cliff enters and tells Sally about himself. She then leaves to go perform her next song, but tells him to leave his number. When he is alone, Bobby and Victor come in, and Cliff and Bobby kiss. Sally sings her final song at the Kit Kat Club (Mein Herr).

Back in Cliff's room, we see Ernst taking his first English lesson. He realises Cliff needs money, and suggests that he supplements his income by making visits to Paris for him. Sally enters and we find that she and Ernst are well acquainted. Sally pleads with Cliff to let her stay in his room, as she has been thrown out of her present room. (Perfectly Marvellous).

'But I've only got one narrow bed', explains Cliff. 'We'll think of something!' says Sally. The Emcee picks up on this them with the next song (Two Ladies).

Fraulein Kost, also renting a room at Fraulein Schneiders place. Schneider enters and argues with Kost, 'I don't want to catch you bringing in any more sailors!' Herr Schultz enters with some fruit for Fraulein Schneider which he has taken from his shop. The 'rare' pineapple that she is greeted with, is enough to make her sing. (It Couldn't Please Me More)

Contrasting with their happiness, on a stark stage the Emcee plays a recording of a child singing the patriotic Tomorrow Belongs to Me.

Cliff is enjoying his stay in Berlin. He agrees with Ernst to bring back a parcel from Paris in a few days time, which he will be well paid for. Sally announces that she has become pregnant. The father of the child is not known, but Cliff could be a possibility. For Cliff, this puts a new perspective on their relationship. Sally wonders if it will work out. (Maybe This Time).

Back at the Klub, the Emcee and the girls entertain the customers (Money).

Fraulein Kost is seen with three sailors coming out from her room. Though Fraulein Schneider would like to complain, she is herself caught coming out of her room with Herr Schultz. He tries to ease her embarassment by saying that they are to be married. The proposal becomes real, and she accepts. (Married)

An engagement Party is planned to be held in Herr Schultz's fruit shop. At the party, Sally presents the couple with a glass fruit bowl as a wedding gift. Ernst is also at the party. He is disgusted at the Jewish aspect to the party, and creates a scene. Cliff realises that the goods he is transporting from Paris are to fund the Nazi party. Fraulein Kost placates everyone, and invites Ernst to sing with her. The song is the Nazi anthem, to which eventually all the guests at the party (except the jewish couple) find themselves singing. (Tomorrow Belongs to Me (reprise))

We are transported back to the Kit Kat Klub, where the girls are forming a Kick-line. One of the dancers is in fact the Emcee, who reveals his true identity (to the amusement of the audience) at the end of the song.

Things are turning ugly for the newly engaged couple. A brick is thrown through the shop window, with the Nazi flag attached. (Married (reprise)).

The Emcee appears with a gorilla, and gives us a song to reinforce the difficulties faced by the Jewish couple. (If you could see her).

In Cliff's room, Fraulein Schneider returns the wedding gift. She explains that she can see no future in her marriage with Herr Schultz, and has broken off their engagement. Both Sally and Cliff attempt to reassure her that things will be alright, but she is adamant. (What would you do?)

Tensions grow between Cliff and Sally. Sally wants to continue with her work at the Klub, but Cliff wants her to come back to America with him, and have the baby. Sally is torn between two worlds. (I Don't Care Much). Back at the Klub, Sally sings the Cabaret theme. (Cabaret).

Later, in Cliff's room, Sally and Cliff slowly come to terms with the seperate lives that they now have to lead. Sally has aborted the baby that may have been Cliff's. Cliff leaves by train, the same way he arrived. (Finale).