Liza Elliott is the successful editor-in-chief of fashion magazine Allure, being published by Kendall Nesbitt. Elliott is a no-nonsense workaholic, who is involved in a relationship with Nesbitt. And while the two wish to marry, they cannot, as Kendall's estranged wife has refused to grant a divorce. Liza has recently developed a series of headaches and strange, bad dreams. On top of all this, she is having to deal at work with marketing manager Charley Johnson, who annoys her greatly and takes pride in doing so. She reluctantly sees and undergoes psychoanalysis with Dr. Alex Brooks, who suggests that her no-nonsense approach to life is caused by something from her past, which has made her avoid all attempts at ever being as glamorous as the models in her magazine. Liza discounts this theory, and after Kendall announces his wife has finally agreed to a divorce, she dreams of a wedding to him where she is chased to the top of a large wedding cake where Charley questions whether she wishes to marry him. Movie star Randy Curtis comes to the Allure offices for a photo shoot, where he corners her into accepting a dinner date with him. Anxious about the date, Liza intends to break it off, and storms out of Dr. Brooks' office when he suggests she is anxious because she is afraid to compete with other women. Charley also informs Liza he will be leaving Allure for another magazine, who has offered more creative rein to him. Kendall confronts Liza about her fears, and she breaks down and confesses she is confused. To try and sort out her feelings, and aware Curtis does not care about her looks, Liza goes on her date with Curtis, changing into a beautiful dress for a change. The date is ruined when they bump into Charley and his date, who aggressively goes after Randy. She goes home, and hallucinates that she is put on trial by Kendall and Charley at a circus. After singing about her troubles, she dreams of her father yelling at her for dressing glamorously. In her story to Dr. Brooks, she tells him of this, and possibly the reason for her devotion to a plain style: following her mother's passing as a young girl, she tried to make him happy by wearing one of her late mother's glamorous dresses, but was instead scolded, and she became detached from him; another incident happened after her high school graduation, where she went to a dance with a boy she liked, who was stolen away by another girl. Dr. Brooks concludes these incidents contributed to her current life, and suggests she allow herself to open herself to her childhood desires. With this new knowledge, Liza decides to quit her job at the magazine and break off her relationship with Kendall, who agrees bitterweetly. Liza is disappointed to find out Curtis was only courting her to be the head of a new production company he has formed. However, when Charley comes to say good-bye to her, Liza realizes that she loves Charley - the last person she ever expected to. She proposes to promote him to run the magazine alongside her, and after arguing over fonts, the two share a passionate kiss.
The film was based on the 1941 Broadway musicalLady in the Dark, written by Kurt Weill, Ira Gershwin, and Moss Hart. The film version cut most of the Weill/Gershwin songs from the score. "The Saga of Jenny" and "Girl of the Moment" remained, and part of "This Is New" is played by a nightclub band in the background. Part of "My Ship" was hummed by Ginger Rogers, but the song itself was never sung.