Deena Jones and the Dreams and Jimmy Early perform at a National Democratic fundraiser, on a bill featuring such groups as The Five Tuxedos ("Got to Be Good Times").
While waiting backstage to go on, Jimmy finds himself in another argument with Lorrell as to the nature of their relationship and when, or if, Jimmy will tell his wife about their affair ("Ain't No Party").
Midway through "I Meant You No Harm", Jimmy falls apart and decides that he "can't sing any more sad songs." Desperate to keep his set going, Jimmy launches into a wild, improvised funk number ("The Rap"), dropping his pants during the performance. to meet and reconcile with Effie at a recording studio ("I Miss You, Old Friend"). C.'s "One Night Only" in its original ballad format.
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After a triumphant show, the press is eager to meet the newly minted stars ("Press Conference").
Curtis declares to Deena, "I'm going to make you the most famous woman who's ever lived," as the slighted Effie asks "What about me? Over the next few years, the Dreams become a mainstream success with hit singles ("Heavy").
However, when Jimmy stops by to visit the girls ("Drivin' Down the Strip"), he learns from the others that Effie has been missing shows because of illness (it is later revealed that she was pregnant with Curtis's child). Curtis shows little interest in updating or revitalizing Jimmy's act because of Curtis's preoccupation with Deena and because of Jimmy's habit of sneaking funk numbers into his repertoire of pop-friendly songs.
Curtis and Deena are convinced that she is trying to sabotage the act. Effie is back in Chicago, a single mother to her daughter, Magic (or Ronald in other versions), struggling to get another break.
Curtis replaces Effie with a new singer, Michelle Morris, a change about which Effie learns before anyone has a chance to tell her. C., and the group ("It's All Over"), but despite her personal appeal to Curtis ("And I Am Telling You I'm Not Going"), the heartbroken Effie is left behind as Deena Jones and the Dreams forge ahead without her ("Love Love Me Baby"). Marty, who is now her manager, compels her to rebuild her confidence and give up her "diva behaviors." Once she does, Effie is able to make a show business comeback ("I Am Changing").
Act II: 1970s By 1972, Deena Jones and the Dreams have become the most successful girl group in the country ("Act II Opening"). In contrast to Effie's struggling return to her musical career, Deena wants to stop singing and become an actress.
Act I: 1960s In 1962, The Dreamettes, a hopeful black girl group from Chicago, enter the famous Amateur Night talent competition at the Apollo Theater in Harlem, New York ("I'm Lookin' for Something", "Goin' Downtown", "Takin' the Long Way Home").
The group is composed of full-figured lead singer Effie White and best friends, Deena Jones and Lorrell Robinson.
Effie is resentful of her change in status within the group. After a fight between Marty and Curtis, Marty quits as Jimmy's manager and Curtis takes over.
The Dreams make their club debut in the Crystal Room in Cleveland, Ohio, singing their first single ("Dreamgirls").
Effie's "One Night Only" becomes a number-one hit, as the Dreams break up so that Deena can pursue her movie career ("Hard to Say Goodbye, My Love").