Covent Garden, London. A group of students arrive early to see the new ballet, 'Hearts of Fire', by the Ballet Lermontov, with music by their tutor, Professor Palmer. However, when one of the students, Julian Crastor, recognises the music as his own, the group leave in disgust. Meanwhile, wealthy patron of the arts Lady Neston extends an invitation to Professor Palmer and Boris Lermontov to join her at a party later that evening. Reluctantly, Lermontov agrees.
At the party, Lermontov is annoyed when Lady Neston proposes to invite her niece, Vicky Page, to perform a dance for him. Later in the evening, Lermontov is approached by a young woman and remarks that they have been spared the spectacle of a dance performance. He is embarrassed when the woman introduces herself as Vicky Page. Vicky impresses Lermontov with her dedication to dancing, and he invites her to rehearsals at Covent Garden the next day.
The next morning, Lermontov is disturbed at breakfast by Julian, who is furious that Palmer stole his music for 'Hearts of Fire'. Lermontov advises Julian to leave the matter alone, but recognises his talent, invites him to a junior position with the orchestra.
Vicki is employed by the company as a junior dancer. When she asks for and receives permission to dance the lead in a small amateur production, she is surprised to see Lermontov in the audience. Later, she is delighted to learn that she is among those selected to tour Europe with the company.
As the tour gets underway, the company's primadonna, Irina Boronskaja, announces during a rehearsal that she is engaged to be married. Convinced that she is no longer committed to dancing, Lermontov dismisses her from the company. Meanwhile, Julian is summoned to see Lermontov, who informs him of his intention to begin a new ballet, 'The Red Shoes', based on a story by Hans Christian Anderson about a young girl who buys a pair of enchanted shoes to help her to dance: the girl dances the night away but finds she is unable to stop dancing, or to take off the shoes; eventually, she dances herself to death. Lermontov presents Julian with a copy of the score for the ballet and tells him that certain parts need improvement. The ambitious Julian, disappointed not to be offered something more challenging, agrees.
When the company reaches Monte Carlo, Vicky is told that she is to be given a chance to dance the lead in 'The Red Shoes'. When Julian plays Lermontov part of his reworked score, Lermontov instructs him to finish rewriting the score. Afterwards, Julian and Vicky meet by chance on the promenade and discuss their new appointments. As rehearsals begin, Lermontov instructs Julian to play the score of 'The Red Shoes' for Vicky at every mealtime.
'The Red Shoes' opens and is a huge success. Lermontov tells Vicky he intends to make her a great dancer - before the season is out she will perform all the great roles. As the season continues, Vicky becomes an enormous success. Lermontov sends a dinner invitation to Vicky, but is told that she has already left the hotel. When he learns that the entire crew have gone to celebrate the birthday of Grischa Lubov, one of the male principals, Lermontov joins the party, but notices that Vicky is not among them. He disguises his alarm when he is told that Vicky and Julian have fallen in love.
When Lermontov tells Julian he thinks that the relationship is affecting Vicky's dancing, and that he is dissatisfied with Julian's latest score, Julian resigns in disgust. Told that the new ballet is to be scrapped, Lubov resigns hastily in anger. The company's designer, Sergei, attempts to talk to Lermontov on behalf of the two, but although Lubov is forgiven, Julian is not. Vicky approaches Lermontov herself, but her plea is rejected, and she leaves the company.
As Vicky and Julian marry and continue their careers elsewhere, the furious and dejected Lermontov is forced to invite Irina Boronskaja to return as his primadonna. The company continues to enjoy success, but when Lermontov learns that Vicky is to join her aunt for a short holiday nearby while Julian is in London preparing for the opening of his first opera, he resolves to intercept her train en route. He invites Vicky to rejoin the company to perform 'The Red Shoes' .
Vicky is preparing for her first night when Julian, who is supposed to be at Covent Garden for his own first night, appears in her dressing room. He pleads with Vicky to return with him, until Lermontov arrives and they quarrel. Torn between her love for Julian and her need to dance, Vicky is unable to go with Julian, who leaves in despair while Vicky is comforted by the triumphant Lermontov. However, as Vicky leaves for the stage, she is apparently possessed by the red shoes. The shoes carry her out of the theatre onto the concourse outside, and finally over a balcony into the path of an oncoming train, while a horrified Julian looks on.
As the orchestra finish the introduction for 'The Red Shoes' , Lermontov appears on stage and announces that Vicky Page will not be appearing tonight or ever again. However, the performance will go ahead without her as a tribute. As the performance begins, Vicky, dying in her husband's arms, asks him to remove the red shoes.
