Don Lockwood is a popular silent film star with humble roots as a hoofer and stuntman. Don barely tolerates his spoiled and conniving costar Lina Lamont, though their studio, Monumental Pictures, links them romantically to increase their popularity. Lina is convinced that they truly are in love, despite Don's protestations otherwise.

At the premiere of their latest film, The Royal Rascal, Don tells the gathered crowd a version of his life story, including his motto: "Dignity, always dignity." His words are humorously contradicted by flashbacks showing him alongside his best friend Cosmo Brown ("Fit as a Fiddle"). To escape from his fans after the premiere, Don jumps into a passing car driven by Kathy Selden. She drops him off, but not before claiming to be a stage actress and sneering at his "undignified" accomplishments as a movie star.

Later, at an after-party, the head of Don's studio, R.F. Simpson, shows a short demonstration of a talking picture, but his guests are unimpressed. To Don's amusement, Kathy pops out of a mock cake right in front of him, revealing herself to be a chorus girl ("All I Do is Dream of You"). Furious at Don's teasing, she throws a cake at him, accidentally hitting Lina in the face, and then flees. Don becomes smitten with Kathy and searches for her for weeks, with Cosmo trying to cheer him up ("Make 'Em Laugh"). While filming a romantic scene, a jealous Lina reveals that her influence is behind Kathy's loss of work and subsequent disappearance. On the studio lot, Cosmo finally finds Kathy quietly working in another Monumental Pictures production ("Beautiful Girl"). Don sings her a love song, and she confesses to having been a fan of his all along ("You Were Meant for Me").

After rival studio Warner Bros. has an enormous hit with its first talking picture, the 1927 film The Jazz Singer, R.F. decides he has no choice but to convert the next Lockwood and Lamont film, The Dueling Cavalier, into a talkie. The production is beset with difficulties, including Lina's grating voice and strong Brooklyn accent. An exasperated diction coach tries to teach her how to speak properly, but to no avail. In contrast, Don fares better when taking diction lessons ("Moses Supposes"). The Dueling Cavalier's preview screening is a disaster; the actors are barely audible thanks to the awkward placing of the microphones, Don repeats the line "I love you" to Lina over and over, to the audience's derisive laughter,^[b] and in the middle of the film, the sound goes out of synchronization, with hilarious results as Lina shakes her head while the villain's deep voice says, "Yes! Yes! Yes!" and the villain nods his head while Lina's squeaky soprano says, "No! No! No!"

Afterward ("Good Morning"), Kathy and Cosmo help Don come up with the idea to turn The Dueling Cavalier into a musical called The Dancing Cavalier, complete with a modern musical number and backstory. The three are disheartened when they realize Lina's terrible voice remains a problem. Still, Cosmo, inspired by the scene in The Dueling Cavalier where Lina's voice was out of sync, suggests that they dub Lina's voice with Kathy's ("Singin' in the Rain"). After hearing Don and Cosmo pitch the idea ("Broadway Melody"), R.F. approves but tells them not to inform Lina that Kathy is doing the dubbing ("Would You").