In early 1960s Detroit, childhood friends Effie White, Deena Jones and Lorrell Robinson attempt to participate in a big talent contest, but because Effie, the powerhouse lead singer of their group, The Dreamettes, is late, the girls are told they cannot perform. Curtis Taylor, Jr., an ambitious Cadillac salesman who wants to break into the music business, persuades the manager to allow The Dreamettes to go on. When he sees how talented the teenaged girls are, Curtis finagles them a job as backup singers for James “Thunder” Early, a charismatic R&B performer whose infidelities have cost him his usual singers. Although Effie is reluctant, as she considers singing backup a “trap,” the other girls are enthusiastic, as is C. C., Effie’s brother who is their songwriter and choreographer. They convince Effie to accept and also to allow Curtis to become their manager, and soon the starstruck girls are accompanying Jimmy on a ten-week, cross-country tour. The beautiful but naïve Deena and giggly Lorrell continue to follow the lead of curvaceous, boisterous Effie, whom Curtis has singled out for attention because he knows that she is the most talented. Jimmy attempts to flirt with Lorrell, but Lorrell, knowing that he is married, rebuffs him. After the tour, Effie begins a romance with Curtis, who tells Jimmy that he needs a “new sound” and gets him to listen to one of C. C.’s songs. Marty Madison, a more old-fashioned manager than the cunning Curtis, thinks that the song is low-class, but Jimmy likes the catchy tune and records it with The Dreamettes in a recording studio that Curtis and his partner, Wayne, have erected inside their car dealership. The group watches excitedly as the song moves up the charts, but then, as has happened frequently with other African-American artists, the song is re-recorded by white singers, with the original version being forgotten. Curtis, Jimmy and the girls are distraught, especially when the white group is featured on the influential television show American Bandstand . Determined to obtain more radio coverage, Curtis resorts to payola, the common practice of paying off radio deejays. To obtain the money, Curtis, Wayne and C. C. work overtime selling cars and gamble with the proceeds. Thanks to the bribes, which are recorded by Curtis in a ledger, Jimmy and the Dreamettes’ next song reaches number one. Because of their new prestige, the group is invited to sing at the Apollo Theatre in New York City, where C. C. choreographs an elaborate show for them. Curtis begins his own record label, Rainbow Records, and Effie is proud of his progress when he releases a recording of Martin Luther King, Jr.’s “I Have a Dream” speech. Hoping that Curtis will promote her more, Effie records a love song for him, and although Curtis promises her that he will not let her magnificent voice “go to waste,” he cynically assumes that she is too dark-skinned and overweight to be his ticket to fame. Curtis is then confronted by Marty, who is furious that he is trying to book Jimmy into the prestigious, white-owned Paradise Hotel in Miami. Curtis in turn lambastes Marty for being so narrow-minded that he has kept Jimmy trapped in the “Chitlin’ Circuit.” After Jimmy affirms that Curtis is his new manager, the disillusioned Marty storms out. Reiterating his motto that Jimmy needs “a new sound,” Curtis softens his rough, jive style, and when Jimmy and the Dreamettes become the first black headliners at the Paradise, they perform a sophisticated ballad. As the number continues, however, Jimmy cannot restrain himself from breaking into some funky dance steps, and the white audience reacts with distaste. After the show, Lorrell confides in Deena that she has lost her virginity to Jimmy, whom she loves even though he is still married. Curtis then informs the girls that they will be forming their own group, without Jimmy, and be renamed The Dreams because they are now grown up. The girls are thrilled by Curtis’ designs for their new look until he tells them that Deena will sing lead while Effie will join Lorrell in singing backup. Although Curtis explains that the prettier, whiter-sounding Deena will ensure them television exposure, Effie is crushed, protesting that she is the one who has “the voice.” Effie is humiliated when C. C. supports Curtis, but eventually they all persuade her to acquiesce by asserting that she will have more opportunities after they are famous. The hotel soon presents the debut of The Dreams, although even Deena’s mother May has reservations about her daughter’s abilities. Curtis is pleased when May observes that he is treating the malleable Deena like “a product,” and continues to manufacture a polished image for the girls. As time passes, The Dreams become a sensation and fulfill Curtis’ ambition by appearing on The Ed Sullivan Show . Effie is annoyed when Curtis praises Deena during press conferences, claiming that she is the “true story” behind The Dreams, and begins to act erratically. Tired of Effie’s diva-like behavior, Curtis chastises her during a recording session and she declares that she knows he is sleeping with Deena, whom she accuses of stealing her dream and her man. Effie attempts to leave, but outside is stunned into immobility by rioters roaming the streets of Detroit. Curtis tenderly ushers her back inside but continues to favor Deena and criticizes Effie for gaining weight. Although Effie protests that she is unwell, everyone, including C. C., grows irritated by her behavior. Just before an important show, Effie is mortified to discover that she has been replaced in the group by Michelle Morris, Curtis’ secretary. Despite Curtis’ betrayal, Effie begs him to love her, but he turns his back on her. Now christened Deena Jones and the Dreams, the group achieves new heights over the next six years, with Curtis overseeing all aspects of their lives. Curtis and Deena, who have married, live in a Hollywood mansion, although Deena remains lonely and unfulfilled as Curtis builds his music empire. Curtis insists that Deena star in a black-produced film about Cleopatra, despite Deena’s protests that she is too old for the part. Curtis attempts to placate her with vows of love, although Deena suspects that he is not interested in the real her, only in the image he can mold. Meanwhile, Effie, having descended into poverty, is attempting to rear her daughter Magic alone. Effie, who never told Curtis that he was a father, has trouble finding singing work because of her reputation for being difficult and asks Marty for help. While Marty attempts to find Effie a job, Jimmy records C. C.’s latest socially conscious song. Curtis dismisses the song, however, telling Jimmy that success is about selling records, not emoting. Crushed, Jimmy resorts to shooting heroin, much to Lorrell’s dismay. Marty persuades nightclub owner Max Washington to audition Effie, who has been sabotaging herself due to her lack of confidence. When Marty and Max react negatively to Effie’s excuses, she regains some of her former bravado and upon becoming the club’s headliner, draws huge crowds. Meanwhile, in Hollywood, Curtis’ groups participate in a televised tribute for the tenth anniversary of Rainbow Records. Backstage, Lorrell tends to Jimmy, who deals with his personal and professional woes by continuing to get high. Lorrell realizes that Jimmy will never leave his wife, who is in the audience, and he ends her tirade by coldly telling her that he has a show to do. While singing the “mellow sounds” forced on him by Curtis, Jimmy changes tempo, declaring that he must be true to himself. His feisty performance wows the crowd, although Curtis is infuriated when Jimmy finishes by dropping his trousers. Curtis fires Jimmy, who turns to Lorrell for comfort, but she responds that she also has a show to do. Later, at Rainbow headquarters, C. C. upbraids Curtis for “squeezing the soul” out of his songs, while at home, Lorrell learns that Jimmy has died from an overdose. C. C. returns to Detroit but Effie, still hurt, refuses to acknowledge him until he corners her at a wake for Jimmy and explains that his newest song could be a hit if it is sung by her rather than becoming homogenized by Curtis. Effie records the song, “One Night Only,” and it becomes popular in Detroit. When Curtis hears it, he buys up all the copies, bribes deejays not to play it and, without telling Deena of its origin, has her re-record it in a disco version. Effie watches with despair as Deena, Lorrell and Michelle perform the song on television, and later, Deena is distressed when Curtis reprimands her for meeting with a movie director behind his back. Declaring that Deena is nothing but what he made her, Curtis warns her that he will never let her out of her contract. Deena discovers that “One Night Only” originally was Effie’s and, realizing that she is at a crossroads, uncovers Curtis’ ledgers detailing his bribery and mob connections. After Deena contacts them, Marty, C. C. and their lawyer confront Curtis, threatening that if he does not allow Effie’s version of “One Night Only” to be distributed nationwide, they will go public with the evidence of his corruption. Deena, who has reconciled with Effie, leaves Curtis, telling him that she needs a new sound. Soon after, at the farewell performance of Deena Jones and the Dreams, Curtis watches glumly as Deena proudly welcomes Effie onstage to sing with the group. While Effie sings to Magic, Curtis follows her gaze and, in astonishment, deduces that Magic is his daughter. As the audience gives The Dreams a standing ovation, Magic cries with pride at her mother’s accomplishment.