The film takes place in Chicago, circa 1927. Naive Roxie Hart visits a nightclub where star Velma Kelly performs ("Overture/All That Jazz"). Hart is having an affair with Fred Casely in hopes that he will get her a gig as a vaudeville star. Velma is arrested after the show for murdering her adulterous husband and sister Veronica after finding them in bed together. Fred meets Roxie at the nightclub and they go home, both very drunk. They make love and then Fred reveals that he lied about his connections in show business and he only wants Roxie for sex. After Fred dismisses Roxie's chances for success in show business she grabs a gun off her dresser and shoots Fred three times. She then tries to make her husband Amos, who is even more naive than she, take the fall ("Funny Honey"). However, the police and Amos (realizing she has been unfaithful to him) see through her ruse and Roxie is arrested and sent to the Cook County Jail.

Once Roxie arrives and is booked, she is sent to Murderess' Row to await trial, under the care of the corrupt Matron "Mama" Morton, who supplies her girls with cigarettes and other materials if she is paid well enough ("When You're Good to Mama"). Roxie meets Velma in jail as the woman in charge, and learns the stories behind the other women in Murderess' Row ("Cell Block Tango"): a pyromaniac driven mad by her boyfriend's gum popping; a woman who discovers her Mormon boyfriend has six wives; another accused of sleeping with the milk man and consequently stabbing her suspicous husband; a Hungarian accused of her husband's murder (though she is actually innocent); Velma, who murdered her sister and husband after discovering their affair; and a woman whose painter boyfriend has numerous affairs, including one with a man. Roxie decides that she wants Velma's lawyer Billy Flynn to get her off ("All I Care About"), and convinces her husband to talk to him. Billy decides to take Roxie's case and get her off by making her a star.

Flynn and Roxie manipulate the press at a press conference, reinventing Roxie's identity to make Chicago fall in love with her ("We Both Reached for the Gun"). Roxie becomes the new infamous celebrity of the Cook County Jail, much to Velma's disgust and Mama's delight ("Roxie"). Velma, desperate to get back into the limelight, tries to talk Roxie into opening a vaudeville act with her once they get out of jail ("I Can't Do It Alone"). Roxie haughtily refuses and mocks Velma as Velma mocked Roxie earlier. Roxie and Velma become locked in a rivalry to outdo each other in stardom. The tables are turned on both women, however, when a new killer named Kitty – a wealthy woman who killed her husband and both of his mistresses – enters the scene.

Roxie manages to steal back attention by claiming to be pregnant, which is falsely confirmed by a doctor (whom she seduced), much to Amos' delight; however, nobody notices that he even exists ("Mister Cellophane"). A Hungarian inmate, whose guilt is highly questionable, is considered guilty and hanged after losing her final appeal, which fuels Roxie's desire to be free. Roxie's trial date approaches, and she and Billy begin to plan their strategy to find her innocent of murder using her star power and sympathy vote ("Razzle Dazzle"). Her trial proceeds and becomes a media spectacle, fed off the sensationalist reports of newspaper reporter and radio personality Mary Sunshine. The trial goes Roxie's way, until Velma shows up with Roxie's diary and, in exchange for amnesty, reads incriminating entries that Roxie claims to never have written. Using some quick talking, Billy manages to get Roxie off the hook and she is proclaimed innocent. However, Roxie's publicity is short lived: as soon as the trial concludes, the public's attention turns quickly to a new murderess. Roxie leaves the courthouse after discovering that Billy wrote the false diary entries, and sent the journal to Velma to get Miss Kelly off death row. Roxie reveals to Amos she faked her pregnancy for the fame. It is implied, but never stated, that Amos leaves her at this point.

With nothing left, Roxie once more sets off to find a stage career, with little success ("Nowadays"). However, she is soon approached by Velma, who is willing to revive a two-person act with Roxie. Roxie refuses at first, because of the hatred that they share for each other, but relents. The two murderesses, no longer facing jail time, finally become the enormous successes they have been longing to be