"Bake" Baker (Astaire) and Sherry Martin (Rogers) are former dance partners, now separated, with Baker in the navy and Sherry working as a dance hostess in a San Francisco ballroom, Paradise.
Bake visits the ballroom with his navy buddy "Bilge" Smith (Scott) during a period of liberty, reuniting with Sherry while Bilge is initially attracted to Sherry's sister Connie (Hilliard). When Connie begins to talk about marriage, Bilge quickly diverts his attention to Iris, a divorced socialite.
The sailors return to sea while Connie seeks to raise money to salvage her deceased sea-captain father's sailing ship. When the boys return to San Francisco, Bake attempts to get Sherry a job in a stage show, but fails amidst a flurry of mistaken identities and misunderstandings. He redeems himself by staging a benefit show which raises the final seven hundred dollars needed to refurbish the ship—although he has to jump ship in order to do so. Bilge, now a Chief Petty Officer, is ordered to locate and arrest him, but allows Bake to complete the show.
The Show Within a Show features one of Astaire and Rogers' most famous duets, "Let's Face the Music and Dance." In this self-contained story, they play two socialites in Monte Carlo. Bake's character, having just lost all his money at the gambling table, is preparing to shoot himself when he spots Sherry's character about to fling herself into the ocean. This snaps him out of his suicidal mood, and he then sets out to convince her through song and dance that she should go on as well.
After the concert, Bilge and Connie, now reconciled, make plans to get married and sail around the world in the newly restored ship. Meanwhile, Bake and Sherry are offered a show on Broadway, which Bake accepts on the proviso that Sherry asks him to marry her. Of course, he first has to be sent to the brig and take his punishment.
The film contains examples of:
- Betty and Veronica: Connie is Betty and Iris is Veronica to Bilge's Archie.
- Break-Up Song: "But Where Are You?" is sung by Connie as one of the entertainers at Iris's party, but it's really about Connie's realization that Bilge has deserted her for Iris.
- Commitment Issues: Bilge.
- Coupled Couples
- Divorce in Reno: Bilge says Iris's husband didn't understand her, "so the poor kid had to go to Reno."
- Dumb Blonde: Discussed. When convincing dark-haired Connie to try a makeover, Sherry comments, "It's isn't that gentlemen really prefer blondes—it's just that we look dumber."
- Gambler Groupies: Bake's character is surrounded by some in the opening sequence of "Let's Face the Music and Dance." They quickly snub him when he loses.
- The Glasses Gotta Go: During Connie's makeover.
- Hey, Let's Put on a Show: Bake and Sherry do this in order to pay for the renovation of Connie's ship (and so that nice old Captain Hickey, who guaranteed the loan, won't lose his job). Slightly more realistic than some versions of this trope, in that they arrange to borrow sets and costumes from a professional theatrical agency.
- Interrupted Suicide: The two characters in "Let's Face the Music and Dance" do this for each other.
- Interservice Rivalry: A marines-vs-navy fistfight.
- "Join the Navy," They Said: The opening song, "We Saw the Sea", is sung by a group of naval ratings contrasting the navy's recruitment pitch with the reality.We joined the navy to see the world.
And what did we see? We saw the sea.
- Loving Details: Bake orders a chocolate sundae without whipped cream for Sherry. This signals both his continuing feelings for her and his desire to reconcile (showing that he both remembers what she likes and wants to give it to her). Sherry is not quite ready to forgive him, so she immediately tells the waiter to make her sundae with whipped cream"and plenty of it!"
- Nice Job Breaking It, Hero!: Bake goes to a theatrical producer to try to get Sherry an audition for a show. He hears that the producer is already auditioning someone he really likes for the part, so Bake sabotages the unknown performer. Of course, what he doesn't realize is that Sherry has gotten an audition on her own, so she's the one he's sabotaging.
- No Antagonist: The obstacles mostly come from misunderstandings and the characters' own flaws. Even Iris is unaware that Connie was seriously interested in Bilge, and seems like a good-natured person to judge by her willingness to help out with the benefit concert.
- Only Known by Their Nickname: Bake, Bilge, and Dopey (another sailor).
- Open Mouth, Insert Foot: Bake suffers from a bad case of this. First he mouths off to the dance hall manager and gets Sherry fired. Then later, he brags to Sherry about how he messed up some girl's audition.
- Pimped-Out Dress:
- Connie borrows a sparkly dress from Sherry for her makeover.
- For "Let's Face the Music and Dance," Sherry wears a gorgeous beaded dress with a fur collar.
- Really Gets Around: Sherry says that Iris will go for "anything in a uniform."
- Repetitive Name: "Bake" Baker. It's probably a nickname, but he's never called anything else.
- Second-Act Breakup: An involuntary one for both couples as the sailors are sent off for war games.
- She Cleans Up Nicely: Connie first shows up at the dance hall wearing a sensible outfit, and Bilge won't give her the time of day. After she borrows a glamorous dress from Sherry and gets a makeover (with the help of Chorus Girls played by Lucille Ball and Betty Grable), Bilge can't take his eyes off her.
- Show Within a Show: The benefit for Connie's ship.
- Tears of Joy: Sherry sheds a few when she's reunited with Bake for the first time in years.
- Wounded Gazelle Gambit: Used a couple of times.
- Sherry gets her revenge on Bake for sabotaging her audition by pretending to be deeply insulted by a guest at Iris' party. Bake immediately goes to punch the guy, not realizing he's an officer. Not only does he lose the fight ignobly, but it costs him his liberty pass on the night of the benefit, leading to the second usage of the trope...
- Bilge shoves Bake when trying to prevent him from jumping ship to go to the concert. Bake pretends to have hurt his arm, and when Bilge comes over to help him up, Bake slugs him and leaps overboard.