Tracy Chambers dreams of becoming a fashion designer and has worked her way up to assistant to the head buyer at a luxury department store in Chicago, a city setting modeled after Marshall Fields on State Street. Her supervisor, Miss Evans, believes that Tracy's night school courses will interfere with her responsibilities at the store. Her aunt encourages her and visits prospective buyers, who tell Tracy her designs are good for Paris but not for Chicago.
One evening, she gets into a shouting match with Brian Walker, a local activist fighting against gentrification in their community.
Sean McAvoy, a fashion photographer, comes to the department store to photograph models, with whom he is dissatisfied. He mistakes Tracy for a new model and creates an impromptu shoot with her, featuring a rainbow-colored gown made by her aunt. As Sean prepares to leave Chicago, he invites Tracy to Rome.
Tracy again encounters Brian Walker during her walk to work and surreptitiously pours milk into his bullhorn's mouthpiece. Brian assumes that one of the construction workers has played a prank on him and a fight begins. Brian is arrested, and Tracy bails him out. Brian becomes her boyfriend, but the relationship does not last long as he does not support Tracy's aspirations.
During this period, Sean reinvents Mahogany and she becomes an in-demand fashion model. An uneasy relationship develops with Sean, who is possessive and jealous of anyone vying for Tracy's attention. Tracy, feeling she owes Sean for her new career, reluctantly agrees to sleep with him. Sean's implied latent homosexuality makes the union a failure.
Brian fails to persuade Tracy to return home with him to support him in his political aspirations.
During their next photo shoot, Sean causes an accident in which he's killed and Tracy sustains severe injuries. A new benefactor, Count Christian Rosetti, lends Tracy his villa for her recovery and a studio space in which she may create her own fashion label.
Because of the tremendous job pressures, Tracy becomes demanding and cruel to her employees. She is unwilling to express her appreciation to her new benefactor by becoming his mistress. She finds her career emotionally empty and not what she dreamed it would be without Brian's love and support.
Following the tremendous success of her first collection, Tracy must decide whether to continue with her empty life in Rome or return to the man she loves in Chicago and use her talents to boost his political prospects. She returns to Chicago and reunites with Brian as he decides to run for Congress.
