The story is of a theatre company who are rehearsing for a musical version of "The Taming of the Shrew". In the show with the producer-actor Fred Graham are his former wife Lilli Vanessi and Lois Lane a singer in whom Fred is interested, although her interest lies in Bill Calhoun. Bill is a gambler who has signed Fred's name to a $10,000 gambling debt. Fred and Lilli patch up their differences reminiscing about the shows they have appeared in together. Meanwhile a bouquet of flowers which Fred has sent to Lois are wrongly delivered to Lilli. "The Taming of the Shrew" gets underway. Lois as Bianca and Bill as Lucentio are upset that Bianca is unable to marry until her elder sister Katherine is married. Fred as Petruchio arrives in search of a rich wife and although Katherine, played by Lilli, is utterly opposed to men, Petruchio agrees to marry her. Meanwhile when Lilli discovers about the flowers she threatens to leave the show. Her departure is prevented by two gangsters who have come to collect the IOU with Fred's signature. At the end of the 1st act Lilli is raging both in character and in reality.

The "Taming of the Shrew" continues but when the gangsters tear up the worthless IOU Lilli prepares to walk out of the show whilst Fred muses on his love for her. As the show comes to a close Lilli unexpectedly returns and in the words of Katherine - the Shrew - expresses her intention of returning to Fred, They are reunited and Lois and Bill reach their own understanding.