In the present, Franklin Shepard is a rich, famous, and influential songwriter and film producer ("Merrily We Roll Along"). The years roll back.
In Frank's swank Los Angeles pad in 1976, after the premiere of his latest film, a party is in full swing. Frank's Hollywood peers are there, and bestow lavish praise on him ("That Frank"). His long-term friend and a theatre critic, Mary Flynn, who is now an alcoholic, is also at the party. She is disgusted by the people Frank has chosen to associate with and by his abandonment of music - the one thing he was truly good at - for the world of commercial film producing. Frank admits that his new film is just a formula picture, but he promises: just wait for the next film! But Mary has given up waiting, and becomes progressively more inebriated. She is ordered to leave after insulting everyone.
Frank is stung by Mary's rants, because he knows they are true. He has concentrated so completely on being a "success" that everything (and everyone) he most valued at the beginning of his career has gone. The evening ends traumatically with the breakup of Frank's marriage to his wife Gussie, a former leading actress in one of his early musicals, when she viciously attacks Meg, whom he has been seeing on the side.
Back to 1973 ("Merrily We Roll Along- First Transition"). Frank and his long-time friend and lyricist, Charley Kringas, are about to be interviewed in a New York TV studio. Mary greets Charley backstage ("Old Friends"), and Charley tells her that Frank never has time to write shows anymore with him. Mary wonders plaintively why can't their collective friendship be "Like it Was". When Frank finally arrives and the TV interview begins, a nervous Charley launches into a rampage on the way his composer has transformed himself into "Franklin Shepard Inc." Frank disowns Charley and walks out - their friendship is over.
It's 1968, and Mary, Charley and Frank are in Frank's apartment on Central Park West ("Merrily We Roll Along- Second Transition"). The two men fight over Frank's decision to do a movie version of one of their shows, Musical Husbands. Frank wants to do it for the money, but Charley says that it will get in the way of writing any new musicals for some time. Mary reminds them that they are all still old friends ("Old Friends" (Reprise)). But nothing is that simple anymore. The Broadway producer Joe Josephson and his wife Gussie arrive. She and Frank have been having an affair. When everyone leaves, Gussie shocks Frank by announcing that she intends to live with him and divorce Joe in the process ("Growing Up").
On to 1966 ("Merrily We Roll Along- Third Transition"). Frank is being divorced by Beth, and they fight over the custody of their young son in a courthouse. Beth confesses to him that she can't live with him knowing he is cheating on her with Gussie ("Not a Day Goes By"). Frank is then consoled by Mary, Charley and his other remaining friends. His pals convince him to start anew, stating that this was the "best thing that ever could have happened" ("Now You Know").
At the opening night of Musical Husbands, Gussie, having just discovered that Frank fancies her, is pondering what could come between the two of them ("Act Two Opening"). The scene transforms, and we see that Gussie is performing the song onstage, as the star of Musical Husbands. Meanwhile, the curtain comes down on the show. As the audience applauds, Charley and Frank, who are backstage with Joe, Mary and Beth, realize they have a hit ("It's a Hit!").
In 1962 ("Merrily We Roll Along- Fourth Transition"): at a party in Gussie and Joe's elegant Sutton Place apartment. Gussie has thrown a soir?e so that Frank and Charley, who are going to write a musical for Joe to produce, can meet most influential people in town ("The Blob"). Pulling Frank away from the party-goers, Gussie convinces him to make his new musical, Musical Husbands, into a "big show" ("Growing Up (Part II)"). Returning to her guests, Gussie invites the songwriters to perform their latest song, "Good Thing Going". The guests love it. Gussie implores them to do an encore. Charley urges Frank not to, but Frank does so anyways. They play the song again, but the guests quickly lose interest and resume their noisy cocktail chatter ("The Blob (Reprise)"). Charley storms out.
Time turns back to 1960 ("Merrily We Roll Along- Fifth Transition"). Charley, Frank and Beth are young and beginning their careers, playing a small nightclub in Greenwich Village. Trying to appear bright and sophisticated, they perform a song celebrating America's new First Family ("Bobby and Jackie and Jack"). Joe is in the tiny audience and he's quite impressed, as is his wife Gussie, who is strongly attracted to Frank at this first meeting. After the show, Frank explains to them that he's marrying Beth, and the happy couple exchanges vows ("Not a Day Goes By (Reprise)"). At an adjoining table, Mary is distraught; she'll always feel something for Frank.
In 1959 ("Merrily We Roll Along- Sixth Transition") Frank, Charley and Mary are busy in New York, working their way up the career ladder ("Opening Doors"). The men audition for Joe, but he wants more "hummable" tunes. So they decide to do their own show and in an ensuing musical montage, end up auditioning and hiring Beth and forming their small cabaret show together.
Finally, it is October 1957 ("Merrily We Roll Along- Seventh Transition"). Early in the morning, Frank, Charley and Mary are on the roof of an old apartment house on New York City's 110th Street, waiting for the first-ever earth-orbiting satellite. Suddenly, Sputnik is there in the sky, and now, for the young friends, anything is possible ("Our Time").