It is the night of the annual banquet thrown by the Sarah Siddons Society, and anybody who is anybody in the New York theater world is there. There we meet Addison DeWitt, a critic who can make or break a career with a single well-turned phrase. Playwright Lloyd Richards is there with his wife Karen. Producer Max Fabian is in attendance and, finally, legendary actress Margo Channing, the Queen of Broadway, with her boyfriend, director Bill Sampson. Tonight, rising star Eve Harrington is receiving the Sarah Siddons Award.
As Addison and Karen trade narrator duties, we are transported to nearly a year ago. Margo is starring in Lloyd’s latest play and Karen arrives at the theater only to run into Eve, a meek and adoring fan waiting outside the stage door to meet Margo Channing. Karen takes Eve backstage to Margo’s dressing room where Eve tells them all her biography: she grew up in the Midwest, married young and lost her husband in the war. After seeing a performance of Margo’s in San Francisco, Margo followed her to New York and began dreaming of a life in the theater.
Charmed by Eve's story, Margo invites her to become her assistant. Eve tags along to the airport where Bill Sampson is catching a plane to Hollywood to direct a film. At Margo's house, Eve insinuates herself into Margo’s life, sometimes taking her duties too far. For instance, she arranges a homecoming party for Bill without informing Margo. At the party, Margo becomes jealous about Eve's involvement with her and Bill's life, getting more and more drunk and throwing barbed insults at everyone in her path. In a private moment, Eve asks Karen to ask Lloyd to cast her as Margo's understudy, to which Karen agrees.
Max Fabian sets up an audition for Claudia Caswell, a young actress, and Margo offers to read with her in the audition. When Margo is late, however, Eve steps in for her, to much praise from the team. Margo is furious at Eve's success and her anger only worsens when she finds out they have made Eve her understudy without her permission. From there, things only get worse: Karen decides that Margo’s diva temperament has gone too far and decides to play a light prank on her. Karen calls Eve and details her plan: after a weekend in the country, Karen will prevent Margo from getting back to New York in time for her performance, so Eve will have to stand in for her as her understudy.
In anticipation for her stage debut, Eve invites all the top theater critics, including Addison DeWitt, to see the performance. She gives an incredible performance. After eavesdropping on Eve’s failed attempt to seduce Bill Sampson in the dressing room after the play, Addison offers to run a story to help Eve's career and the two do an informal interview. The next day his column not only praises Eve’s performance, but does so at the expense of Margo. The column quotes Eve as criticizing older actresses trying to play younger roles. When Margo reads the article, she is, unsurprisingly, livid. Through a shared resentment of Eve, Bill, Margo, Lloyd, and Karen become closer friends.
However, Lloyd decides he wants his next play to head into production immediately, and that he wants to cast Eve in the lead role rather than waiting for Margo to end her current run. Lloyd is ready to go through with it, but needs to get Karen's approval. At a restaurant, Bill and Margo announce their engagement. After calling Karen to the ladies room at the restaurant, Eve threatens to expose their prank to Margo with the help of Addison if Karen doesn’t get Lloyd to cast her in his new play. When Karen heads back to the table, she hears Margo saying she doesn’t want to play the part anyway.
On opening night of Lloyd's new play, in New Haven, Eve invites Addison into her room and tells her that Lloyd is leaving Karen to marry her. Addison becomes territorial and tells her that she belongs to him, before revealing that he knows the truth about her past. Eve is not the innocent widow that she portrayed herself to be; she left Wisconsin after having an affair with her boss, and she is not a widow at all. He uses his knowledge of her past as blackmail to get Eve to be with him.
The film shifts back to the present day. Eve is accepting her award and gives a passionate speech thanking everyone who has helped her, including Bill, Lloyd, Margo, and Karen. Afterwards, she returns to her apartment, exhausted, where she finds a young woman named Phoebe asleep in her living room. As she wakes up, Phoebe tells Eve that she is the Eve Harrington fan club at her school and she snuck in so she could meet her. The doorbell rings and Eve asks Phoebe to take care of whoever it is. It turns out to be Addison with the award that Eve left behind in the taxi. Phoebe takes it from him. With Eve exhausted in the living room, Phoebe takes the award into the bedroom, tries on Eve’s jacket and stands in front of a mirror posing and bowing as if she won the trophy herself.
