The story spans 47 years, beginning aboard the show boat Cotton Blossom in the 1880s, on the Mississippi River near Natchez, Mississippi. Cap'n Andy Hawks, owner of the showboat, introduces all of his actors to the excited crowd on the levee.
Almost immediately, a fist fight breaks out between Steve Baker, the leading man of the troupe, and Pete, a rough, coarse engineer who had been making passes at Steve's wife, Julie La Verne, the company's leading lady. Steve knocks Pete down and Pete swears revenge, apparently knowing some dark secret about Julie. Cap'n Andy pretends to the shocked crowd that the fight was a preview of a scene from one of the melodramas performed on the boat. The troupe exits with the showboat band.
A handsome riverboat gambler, Gaylord Ravenal, comes aboard the boat and is taken with eighteen year old Magnolia Hawks, an aspiring performer and daughter of Cap'n Andy and his wife Parthy Ann. Magnolia (aka Nolie) is likewise smitten with Ravenal. She seeks advice from Joe, one of the Negro (the word then in vogue) workers aboard the boat. He replies that there are "lots like [Ravenal] on the river",  and, as Magnolia excitedly goes inside the boat to tell her friend Julie about the handsome stranger, Joe mutters to himself that she ought to ask the river for advice. With the other dock workers joining him in the second chorus, he then sings the well known song, Ol' Man River.
During the rehearsal for that evening's show, full of comical blunders, the mood abruptly changes when Julie and Steve are alerted that the town sheriff is coming to arrest them. To the shock of all except Julie, Steve then takes out a large pocket knife and makes a cut on the back of her hand, sucking the blood and swallowing it. Then Pete returns with the sheriff, who insists that the show not go on, because Julie is a mulatto woman married to a white man, and local laws prohibit miscegenation. Julie admits that she is a mulatto. But Steve, because he swallowed Julie's blood (and therefore has at least "one drop of black blood" in him), is able to claim that he too is mulatto. The sympathetic troupe backs him up. The sheriff is powerless to arrest Julie and Steve, but they must leave town anyway. Pete is fired by Cap'n Andy. As Julie and Steve prepare to leave, Gaylord Ravenal returns and asks for passage on the boat: his gambling has cost him the boat ticket he planned to use to leave town. Noticing Ravenal's good looks, Andy immediately hires him as the new leading man, and suggests, over Parthy's objections, that Magnolia be the new leading lady. Julie bids a tearful goodbye to Magnolia and leaves with Steve.
Weeks later, Magnolia and Gaylord are an enormous hit with the crowds and have fallen deeply in love. Gaylord proposes to Magnolia and she accepts. The two are married while Parthy is out of town: she can do nothing, despite her disapproval of Gaylord.
Years pass. Gaylord and Magnolia are living in Chicago with their daughter, Kim. Gaylord's gambling debts are out of control, so their living quarters are a cheap apartment. Depressed and shamed by his inability to support his family, Gaylord leaves Nolie. Frank and Ellie, two actors on the boat, choose this time to visit. These old friends seek a singing job for Magnolia at the same club where they are doing a New Year's show, a club called the Trocadero. Unbeknownst to Magnolia, Julie, abandoned by Steve and now a drunken cabaret singer at the Trocadero, hears Magnolia singing "Can't Help Lovin' Dat Man" for her audition, the song Julie taught her years ago. Julie secretly abandons her position so that Magnolia can fill it, and Magnolia never learns of her sacrifice. (At this point, the character of Julie completely disappears from both the stage and the 1936 film versions, though in the 1951 film she is given one more scene near the end.)
On New Year's Eve, Andy, in Chicago with Parthy for a surprise visit, ends up at the Trocadero while celebrating without her. He is unaware of Magnolia's presence and troubles, only to discover her choked with emotion and nearly being booed off stage. Andy rallies the crowd to her defense by standing up and initiating a grand sing-along of the old song "After the Ball". Magnolia becomes a great musical star.
More than 20 years pass; it is now 1927. Magnolia has become an international star of the stage and radio. Cap'n Andy has a chance meeting with Ravenal and, knowing that Magnolia is retiring from the stage and returning to the Cotton Blossom with Kim, arranges for a reunion. Although Ravenal is uncertain whether he has the right to ask Magnolia to take him back, she does. As the happy couple walks up the boat's gangplank, Joe and the chorus sing a final reprise of "Ol' Man River".
Note: The 1951 MGM film changed many aspects of the story. A major change brings Ravenal and Magnolia back together only a few years after they separated, rather than twenty-three years afterward: Gaylord has a chance meeting with Julie, and learns that he has a daughter whom he didn't know about. Gaylord returns, finding Kim playing, and when talking to her, she mentions a game "make believe" that she knows (Kim is seen only as a cute child in this film). Magnolia sees them and takes him back, and the family returns to the showboat. Joe and the chorus start singing "Ol' Man River" as the scenes unfold, then the paddlewheel starts turning in tempo with the music, heading down river. Julie is shown, viewing the scene from a distance: aware that he would return to the showboat, Julie has followed him and watched the events, but only from the shadows.
SYNOPSIS Lyrics From The Musical Show Boat