Alexandra “Alex” Owens (Jennifer Beals) is an eighteen-year-old welder at a steel mill in Pittsburgh, Pennsylvania, who lives with her dog Grunt in a converted warehouse. Although she aspires to become a professional dancer, she has no formal education, and works as an exotic dancer by night at Mawby’s, a neighborhood bar and grill which hosts a nightly cabaret.
Lacking family, Alex forms bonds with her coworkers at Mawby’s, some of whom also aspire to greater artistic achievements. Jeanie (Sunny Johnson), a waitress, is training to be a figure skater, while her boyfriend, short-order cook Richie (Kyle T. Heffner), wishes to become a stand up comic.
One night, Alex catches the eye of customer Nick Hurley (Michael Nouri), the owner of the steel mill where she works. After learning that Alex is one of his employees, Nick begins to pursue her on the job, though Alex turns down his advances at first. Alex is also approached by Johnny C. (Lee Ving), who wants Alex to dance at his nearby strip club, Zanzibar.
After seeking counsel from her mentor Hanna Long (Lilia Skala), a retired ballerina, Alex attempts to apply to the Pittsburgh Conservatory of Dance and Repertory. Alex becomes intimidated by the scope of the application process, which includes listing all prior dance experience and education, and she leaves without applying.
Leaving Mawby’s one evening, Richie and Alex are assaulted by Johnny C. and his bodyguard, Cecil. Nick intervenes, and after taking Alex home, the two begin a relationship.
At a skating competition in which she is competing, Jeanie falls twice during her performance and sits defeated on the ice and has to be helped away. Later, feeling she will never achieve her dreams, and after Richie has left Pittsburgh to try to become a comic in Los Angeles, Jeanie begins going out with Johnny C. and works for him as a Zanzibar stripper.
After seeing Nick with a woman at the ballet one night, Alex throws a rock through one of the windows of his house, only to discover that it was his ex-wife (Belinda Bauer) whom he was meeting for a charity function. Alex and Nick reconcile, and she gains the courage to apply for entrance to the Conservatory. Nick uses his connections with the arts council to get Alex an audition. Alex is furious with Nick, since she did not get the opportunity based on her own merit and decides not to go through with the audition. Seeing the results of others’ failed dreams and after the sudden death of Hanna, Alex becomes despondent about her future, but finally decides to go through with the audition.
At the audition, Alex initially falters, but begins again, and she successfully completes a dance number composed of various aspects of dance she has studied and practiced, including breakdancing she has seen on the streets of Pittsburgh. The board responds favorably, and Alex is seen joyously emerging from the Conservatory to find Nick and Grunt waiting for her with a bouquet of roses.