It stars Klaus Maria Brandauer as a German stage actor (modeled on Gustaf Gründgens) who finds unexpected success and mixed blessings in the popularity of his performance in a Faustian play as the Nazis take power in pre-WWII Germany.

The film adapts the story of Mephistopheles and Doctor Faustus by revealing the costs to the main character Hendrik Höfgen as he abandons his conscience and continues to perform, ingratiating himself with the Nazi Party in order to retain his job and improve his social position.

While his wife, leading actors, and friends go into exile, or protest against the new regime, Hendrik returns to Germany lured by the promise of forgiveness for his communist theatre escapade and a desire to act in his native language.

Hendrik reprises his greatest role as Mephisto and agrees to run the national theatre, working around the cultural restrictions and brutality of the Nazi government.

He blithely overlooks the profound moral compromises of his situation, excusing himself by using the power of his close relationships with Nazi officials to help friends who would otherwise be targeted by the regime.