In 1927, silent film star George Valentin is posing for pictures outside the premiere of his latest hit film when a young woman, Peppy Miller, accidentally bumps into him. Valentin reacts with humor to the accident and shows off with Peppy for the cameras. The next day, Peppy finds herself on the front page of Variety with the headline “Who’s That Girl?” Later, Peppy auditions as a dancer and is spotted by Valentin, who insists that she have a part in Kinograph Studios’ next production, despite objections from the studio boss, Al Zimmer. While performing a scene in which they dance together, Valentin and Peppy show great chemistry, despite her being merely an extra. With a little guidance from Valentin (he draws a beauty spot on her, which will eventually be her trademark, after finding her in his dressing room), Peppy slowly rises through the industry, earning more prominent starring roles.
Two years later, Zimmer announces the end of production of silent films at Kinograph Studios, but Valentin is dismissive, insisting that sound is just a fad. In a dream, Valentin begins hearing sounds from his environment (as does the audience), but cannot speak himself, then wakes up in a sweat. He decides to produce and direct his own silent film, financing it himself. The film opens on the same day as Peppy’s new sound film, as well as the 1929 Stock Market Crash. Valentin’s only chance of avoiding bankruptcy is for his film to be a hit. Unfortunately audiences flock to Peppy’s film instead, and Valentin is ruined. His wife, Doris, kicks him out, and he moves into an apartment with his valet/chauffeur, Clifton, and his dog. Peppy goes on to become a major Hollywood star.
Later, the bankrupt Valentin is forced to auction off all of his personal effects, and after realizing he has not paid loyal Clifton in over a year, gives him the car and fires him, telling him to get another job. Depressed and drunk, Valentin angrily sets a match to his private collection of his earlier films. As the nitrate film quickly blazes out of control he is overwhelmed by the smoke and passes out inside the burning house, still clutching a single film canister. However, Valentin’s dog attracts the help of a nearby policeman, and after being rescued Valentin is hospitalized for injuries suffered in the fire. Peppy visits the hospital and discovers that the film he rescued is the one with them dancing together. She asks for him to be moved to her house to recuperate. Valentin awakens in a bed at her house, to find that Clifton is now working for Peppy. Valentin seems to remain dismissive of Peppy having taken him in, prompting Clifton to sternly remind Valentin of his changing luck.
Peppy insists to Zimmer that Valentin co-star in her next film, threatening to quit Kinograph if Zimmer does not agree to her terms. After Valentin learns to his dismay that it had been Peppy who had purchased all his auctioned effects, he returns in despair to his burnt-out apartment. Peppy arrives, panicked, and finds that Valentin is about to attempt suicide with a handgun. Peppy tells him she only wanted to help him. They embrace and Valentin tells her it’s no use; no one wants to hear him speak. Remembering Valentin’s superb dancing ability, Peppy persuades Zimmer to let them make a musical together.
Now the audience hears sound for the second time, as the film starts rolling for a dance scene with Peppy and Valentin and their tap-dancing can be heard. Once the choreography is complete, the two dancers are heard panting. The director of the musical calls out audibly, “Cut!” to which Zimmer adds: “Perfect. Beautiful. Could you give me just one more?” Valentin, in his only audible line, replies “With pleasure,” revealing a French accent. The camera then pulls back to the sounds of the film crew as they prepare to shoot another take.