During World War I, Lili Smith is a beloved English musical star and a secret German spy, Julie Andrews widely admired by the French and British pilots she mingles with at the Café Can-Can. One American, Major William Larrabee, Rock Hudson, woos her with a gypsy serenade outside her window and invites her to a night-time champagne picnic.
She begins passing information gleaned from Larrabee to Colonel Kurt Von Ruger, the German liaison masquerading as her uncle, Jeremy Kemp. Larrabee showers her with red roses, and their courtship grows.
The French authorities think Larrabee is the spy and ask Lili to keep an eye on him. While out at dinner, a drunken fellow pilot, Lieutenant Carstairs, Lance Percival, asks about Operation Crepe Suzette, and he is deflected by a reminder that the operation is top secret, which Lili reports to Von Ruger.
The French agents, Major Duvalle and Lt. Liggett, Jacques Marin and André Maranne, spy on both Larrabee and Lili at a hotel getaway where they share a room. As they begin to make love, Lili accuses Larrabee of calling her Suzette, and in a panic he tries to deflect by saying he said "my pet," which she rejects. He soon admits that Operation Crepe Suzette is a military operation and teases a few more details she reports to Von Ruger.
With Larrabee away on a mission, the French tell Lili they now suspect Crepe Suzette, a burlesque dancer, and she goes to weigh up the competition. In a fury Lili then performs her own striptease to a song that seemed demure before. When Larrabee returns and tells her the true story of his encounter with the Red Baron, she mocks him—until Von Ruger calls and confirms it. But when Larrabee leaves, Lili follows him despite her earlier belief.
Lili plants her code book in Suzette's rooms to trap Larrabee and Suzette on treason charges after she sees them together. While Lili is awarded the Legion of Honour at a huge ceremony, the evening paper reveals Suzette's claim that Larrabee met her to end the relationship because he was in love with another woman.
Lili goes to the French to confess in an attempt to save Larrabee from the firing squad, evading a German assassin on the way. Von Ruger plans an escape to Switzerland, but the assassin captures them on the train. The assassin dies in a German aerial attack on the train, while Larrabee's squadron defends it. He sees Lili on the ground and tips his wing in salute.
The war ends, and Lili sings on a dark stage in Geneva, surrounded by pilots looking on from the wings. Larrabee comes out, kisses her, and the crowd cheers.
