Cecilia is a waitress in New Jersey, living a dreary life during the Great Depression. Her only escape from her mundane reality is the movie theatre. After losing her job, Cecilia goes to see 'The Purple Rose of Cairo' in hopes of raising her spirits, where she watches dashing archaeologist Tom Baxter time and again.

A hapless talent manager named Danny Rose, by helping a client, gets dragged into a love triangle involving the mob. His story is told in flashback, an anecdote shared amongst a group of comedians over lunch at New York's Carnegie Deli. Rose's one-man talent agency represents countless incompetent entertainers, including a one-legged tap dancer, and one slightly talented one: washed-up lounge singer Lou Canova, whose career is on the rebound.