Damiel and Cassiel are two angels who are sent to Earth to observe life on and to pay attention to the passing of time. Damiel and Cassiel are currently in West Berlin and, although there are other angels, these two are generally on their own. Visible only to children and other angels, they spend their time watching the changes in the landscape and observing the human condition. At times, Damiel and Cassiel will attempt to offer comfort and hope to those that they observe but, because they cannot be seen, they are not always successful in this endeavor. Cassiel states that they reason the angels exist is to “assemble, testify, and preserve” life.
The story takes place in West Berlin, Germany, shortly before the destruction of the Berlin Wall. In the beginning of the movie, Damiel is shown on top of a statue listening to the thoughts of the Berliners that pass underneath him. As he watches them, Damiel muses that he wishes he could see colors like they do, since angels only see the world in black and white. The movie follows Damiel on his daily routine, passively interacting with various people and groups. He flies across the city, listening to an ambulance, the thoughts of a pregnant woman in the ambulance, and the thoughts of the drivers of the cars that are passed by the ambulance. The viewer is as passive as the angel: our job is also to listen and to observe without being a part of anything.
Soon, Damiel meets with Cassiel in a car, and they discuss their daily logs and routines. Damiel watches a young couple on the street embracing, and tells Cassiel that as much as he enjoys his work, immortality, and watching societies grow and change, he really wants to be able to focus on the moment, live day to day, like the couple on the street. Eventually they move on to the library, where the other guardian angels in the city gather.
Damiel moves on to the subway, where he encounters a young man who feels that life is too hard, and is contemplating suicide. Sensing his thoughts and needs, Damiel puts his hand on the man’s shoulder. While the man cannot see Damiel, he can feel his compassion, and the young man becomes hopeful. There are several people that the angels pay special attention to during his day, including an old poet named Homer who is searching for hope and eternal peace, the cast of a movie about the history of the Nazis in Germany during World War II, starring Peter Falk, and the performers of a small, and shabby circus with in financially crippled.
As he is watching the circus, Damiel notices a young trapeze artist named Marion, who is worried that, because of the full moon, she will fall and break her neck. Marion is very sad and forlorn, and Damiel hears her wishing that she had someone in her life to love, and to love her. When she finishes in the circus and wanders back to her trailer, Damiel follows her, listening to her thoughts, wanting to be human enough to offer her solace and love.
Meanwhile, Cassiel is in a car, listening to the driver think about how the Germans have instituted so many borders, both real and symbolic, in their lives. He thinks “Every street has its borderline. Between each plot, there's a strip of no-man's-land disguised as a hedge or a ditch. Whoever dares, will fall into booby traps or be hit by laser rays... Every home owner, or even every tenant nails his name plate on the door, like a coat of arms and studies the morning paper as if he were a world leader. Germany has crumbled into as many small states as there are individuals… Everyone carries his own state with him, and demands a toll when another wants to enter. But one can only enter each state with a password.”
Outside of the car, Peter Falk, playing himself, is telling a boy about the movie he is currently making about Hitler, and asking the boy if the plot sounds feasible. We hear Peter Falk talking from outside the car. He is telling a young boy about the new movie plot. Cassiel watches him as Falk asks for a new hat, one that will make him look like a regular German. Damiel is also watching, albeit from the second floor. While the angels observe the cast and crew of the movie, and listen to their thoughts, Falk goes up to one of the extras and asks if he can draw her while they wait.
When the filming begins again, Damiel asks Cassiel to come with him, and takes him to go see Marion at the circus. The circus is performing, and the audience consists of mostly children. A young girl sitting next to Damiel talks with him throughout the performance, while Damiel muses about the differences between adults and children. Marion enters the ring, and does some tricks while she climbs a rope. After the performance, the children run onto the stage and begin to play and laugh with all the members of the circus.
The next thing we see is Cassiel and Damiel walking through Berlin, talking about the creation of the earth, and watching the passage of time. You start to really understand that the angels have been here forever—they talk about when the land was formed, and how, for years, the only thing that lived on Earth was fish.
The circus must close because they cannot afford to remain open any longer. Marion is in her trailer, preparing for the last performance, telling herself that she can do the performance without breaking her neck. Damiel watches the last performance. After the magician, Marion gets on the trapeze and, despite a couple of minor scares, she can make it all the way through the performance without breaking her neck. After the show, the performers all gather around the fire, and Marion wonders what it would be like to be happy. Damiel continues to follow her throughout her night. The only time she feels calm and self-possessed is the moment that Damiel touches her. When Marion goes back to her trailer to go to sleep, Damiel sits with her, and eventually falls asleep on her. In her dream, they are both in heaven, talking, and touching hands.
In the morning, Cassiel is on a bus, and Peter Falk is walking through a field contemplating his Jewish grandmother. Damiel sees him, and follows him to a small snack outlet, where Peter starts talking to him. He says that while Falk cannot see the angel, he can feel his presence. Everyone at the snack place looks at Falk as if he is crazy, but Falk just continues to talk to Damiel about how amazing all the little things in life are. Cassiel walks on a street by the wall and meets Damiel in the military zone between the two walls.
After an eternity of watching time pass and not being able to interact with it, or anyone, who is not an angel, Damiel tells Cassiel that he thinks he wants to become human. He knows this choice is irreversible—once an angel gives up being an immortal servant of God, they can never go back again. Damiel wants to feel things, not just in the physical sense, but in the emotional one as well. Damiel notes that he wants to see color and to feel alive. As he is talking about what his first day will be like, the world starts changing to color. This is our first indication that Damiel is turning human. He looks behind himself, and sees that his footprints are there, but Cassiel’s are not.
Damiel awakens on the east side of the Berlin Wall as he is struck in the head by his bronze armor. As he gets up, Damiel feels his head and his hand comes away bloody. He tastes it and understands that it is blood. Since he has never seen color before, he must ask a pedestrian next to him if the blood is red. The passerby stops and talks to him and the observe the wall as the stranger tells the newly human Damiel all the colors. Before leaving, the stranger gives Damiel some money to buy coffee, which he does at a local kiosk.
After selling his armor at a local antique store, Damiel heads to the movie set where Peter Falk is filming. When he tries to enter, he is denied by security. This is the first time in his long existence that Damiel is not allowed to go anywhere he wants. Instead he waits for Falk at the gate, with other fans. When Falk comes out, Damiel calls him over. Falk is very glad to meet Damiel, even though he was expecting a taller man. It turns out that Peter Falk is also a fallen angel. They talk for a few minutes about their experiences, and then Falk turns to leave. Damiel asks him to tell him about life, but Falk says he must find out by himself.
Meanwhile, Marion is packing up her trailer and getting ready to leave the circus. After their goodbyes, they depart, and Marion is left standing in an empty field, alone. Cassiel is nearby, and wakes up to the sounds of Marion’s thoughts. She feels all alone, and has no idea who she is or what she should do with herself. After she leaves, Damiel comes to the field, and is disappointed that he has missed her. Cassiel watches Damiel and learns through his thoughts that he will look for Marion tonight.
As Damiel comes out of the subway, he sees Marion go to a snack center where Peter Falk joins her. Marion asks him is he knows how to find people, but when asked if she is looking for someone, Marion says she does not know. Marion continue to walk on the street, and Damiel turns away, finding a flyer for the band that performed at the concert Marion attended. He goes to the concert, and finds Marion there, listening to a song about the circus leaving town. Cassiel is standing next to the singer, observing Marion, Damiel, and the band, even though they cannot see him.
As Cassiel walks off the stage, Damiel and Marion meet at the bar. He gives her a drink and tries to get closer, but Marion stops him and starts talking. She says that loneliness has made her whole and that the new moon is one of decision, and that she is ready to end her loneliness. She knows that it is Damiel that she will be with, because he needs her. He smiles as she talks, and when she is done, they kiss.
The end of the movie shows the same guardian angel statue that begins the movie. Cassiel is sitting on a cloud as Damiel talks about Marion. Together they have become one, and when she took him home, he found his own home in her. He says, “I know now, what no angel knows.” As he leaves, Cassiel is atop the statue, listening to the thoughts of those around him, knowing that they need him to tell their story.