Sonny Malone (Michael Beck) is a frustrated artist. He has tried to leave a job he hates--painting large display versions of record-album covers--but he shreds his efforts and throws them out the window. The pieces blow past a mural of nine dancing women. THE WOMEN GLOW INTO LIFE AND LEAP FROM THE PAINTING! They dance down the street and turn into streaks of neon light, with accompanying "whoosh" sounds. Sonny does not see this. He returns to his hated job. On the way there, he is kissed by one of the nine women (Olivia Newton-John). At work, his co-workers lovingly chide him.
His tyrannical boss orders him to paint just what he is told and nothing more. He seems beat down, but his next assignment is an album cover... with the kissing woman on it! He asks around--who is the kissing album-cover woman? A guy behind the desk says she's not on the payroll. The photographer can't explain how she got into the shoot for the album cover--of a hundred pictures, she's in only one. A guy on a porch hasn't seen her (but tries to set Sonny up with one of his daughters).
Sonny goes to look for her at the scene of the kiss. He hears a clarinet played by an older gentleman who sits on a rock by the ocean. The older gent is Danny McGuire (Gene Kelly). One thing leads to another, Danny and Sonny become friends and decide to open a club together, and Sonny meets the kissing album-cover girl, who is named Kira. Sonny and Kira fall in love, but Kira reveals to him that she's a supernatural being, a muse.
She's not supposed to fall in love with mortals. Rather, her purpose in the universe is to inspire people--men, it seems--to achieve a dream; then she moves on. So, sadly, she must leave. Sonny is glum, but Danny tells him not to accept this situation.
Sonny finds the wall upon which Kira was, and is, a painting. He looks at the wall, then roller-skates quickly toward it and jumps into it! He crosses over into an unspecified but disco-y dimension and finds Kira. After politely protesting with Zeus about Kira's being separated from him, he is banished back to our mortal realm. In a big closing number with dancers galore, the club opens and Danny brings Sonny and Kira together.