Although Michael Dorsey is a passionate and respected acting coach in the New York City theater scene, directors continually refuse to hire him because of his combative personality and perfectionism. On his birthday, Michael’s amateur playwright roommate, Jeff Slater, throws him a surprise party at their apartment. Afterward, Michael helps his actress friend Sandy Lester prepare her audition for the television soap opera, Southwest General. The next morning, Michael accompanies Sandy to the studio, where she is promptly rejected for her appearance. Upon learning that one of his former colleagues received a Broadway role he had been expecting to play, Michael barges into the office of his talent agent, George Fields, and desperately demands more acting jobs. Distressed, George informs Michael that his notorious reputation for being difficult to work with has made him unemployable in the entertainment industry. As a result, Michael returns to the television studio and auditions for Southwest General dressed as a middle-aged woman named “Dorothy Michaels.” When director Ron Carlisle dismisses “Dorothy” for not being threatening enough to play the “masculine” hospital administrator, “Emily Kimberly,” she criticizes him for his sexist depiction of women. Impressed by “Dorothy’s” gumption, Ron and producer Rita Marshall hire her for the role. Still in disguise, Michael follows George into a restaurant to announce the news of his job offer, and convinces the agent to loan him money for clothes, makeup, and wigs until he receives his first paycheck. Although Michael plans to use the $8,000 wages to produce Jeff’s most recent play, Return to the Love Canal, he keeps his casting a secret from Sandy by claiming he inherited the money from a dead relative. Michael is inspired to try on her clothes while she showers, but when she catches him undressing, he attempts to cover his actions by confessing that he wants to have sex with her. Afterward, she fears that their relationship will change, but Michael promises to continue dating her. The next morning, he awakens early to groom himself and apply makeup for “Dorothy’s” first day of filming. Once in her dressing room, she meets another actress, April Page, and receives the day’s last-minute script changes. On the set, “Dorothy” watches uncomfortably as Ron condescendingly directs the show’s star, Julie Nichols. She is then required to film her scene without rehearsal, and improvises her way out of having to kiss her philandering co-star, John Van Horn. Although her colleagues praise her for the instinctual change, the actor kisses her off-camera anyway. Later, “Dorothy” watches as Julie and Ron leave the studio together, prompting her to become increasingly annoyed with their boss’s chauvinist behavior. When the telephone rings that night, Michael and Jeff argue about how to answer in case the call is for “Dorothy,” and Jeff leaves in frustration. Over the next few weeks, “Dorothy’s” presence elevates the quality of the show and gains her a large fan following. While staying late for re-shoots, “Dorothy” sees Ron kissing April behind the set, but decides not to tell Julie. Forgetting Michael’s dinner date with Sandy that evening, “Dorothy” accepts Julie’s invitation to rehearse their lines for the next day. After fretting over what to wear, “Dorothy” goes to Julie’s apartment and learns that she has an infant daughter. She asks questions about Julie’s relationship with Ron and they discuss the difficulties of being a woman in the 1980s. Suddenly remembering his obligation with Sandy, Michael returns home and removes the disguise before running to her apartment. Despite his apologies, Sandy declares that she saw “Dorothy” entering Michael’s apartment earlier, mistaking her for his lover. Michael claims that she is a friend of Jeff’s, and Sandy apologizes, blaming her continued bitterness over losing the part on Southwest General. After she criticizes “Dorothy’s” dialogue on the show, Michael begins to improvise lines that strengthen the program’s feminist message. Consequently, both “Dorothy” and the character gain national media attention, and Michael unsuccessfully begs George to let him audition for other female roles. Instead, the agent invites him to a party hosted by a high-profile Broadway producer, also attended by Julie and Ron. Michael then attempts to flirt with Julie by using a pick-up line she referenced in an earlier conversation with “Dorothy;” the plan backfires, however, as she throws champagne in his face. At work, “Dorothy” chastises Ron for disrespectfully addressing her as “Tootsie,” and later accepts Julie’s invitation to stay at her father Les’s farmhouse for the weekend. As Les grows more attracted to “Dorothy,” she eventually escapes his advances by retreating to her and Julie’s room, where they share a bed and fall asleep snuggled together. Once back in New York City, “Dorothy” receives a box of chocolates from Les, and Rita Marshall signs her for another year on Southwest General. Michael hopes to get out of the commitment, but George insists that revealing his identity would ruin both their careers. One night, “Dorothy” babysits Julie’s daughter while she ends her relationship with Ron. Upon returning, Julie admits that she has very strong feelings for “Dorothy," who responds by attempting to kiss her. Moments later, Les invites “Dorothy” on a date and proposes marriage. Startled, “Dorothy” agrees to “think about it,” and finds John Van Horn waiting on her doorstep at home. Declaring his love, he forces himself on her until Jeff walks in and John leaves in embarrassment. Moments later, Sandy arrives, and the roommates scramble to remove Michael’s disguise. As she confronts him about his evasiveness, Michael gives her “Dorothy’s” box of chocolates, but she finds Les’s note attached to the wrapping. Although Michael explains that he is in love with another woman, Sandy believes he is lying to conceal his homosexuality. At work the next day, Julie thanks “Dorothy” for inspiring her to be true to herself, but ultimately ends their friendship in order to extinguish any hope “Dorothy” may have for a romantic relationship. When a technical difficulty forces the cast to perform their scenes on live television, “Dorothy” strays from the script, inventing an outrageous monologue and pulling off her wig to reveal that “Emily Kimberly” is actually her twin brother, “Edward.” Audience and crew members alike are shocked by the revelation, and once the camera cuts, Julie punches Michael in the stomach. As the ensuing media frenzy begins to diminish, Michael returns Les’s engagement ring and admits that he has always been attracted to Julie. One day, Michael waits for Julie outside of work and apologizes for hurting her. When she confesses that she misses “Dorothy,” he declares, “I was a better man with you as a woman than I ever was with a woman as a man.” Smiling, she asks to borrow one of his dresses, and they walk together down the street.