The audience enters into Christian's memories. It is 1899, and Christian arrives in Paris as a naive and idealistic writer in pursuit of his place in the Bohemian world. He chooses the neighborhood of Montmartre, Paris, knowing it to be the epicentre of the Bohemian world at the height of the Bohemian movement. His life plan is vague at best, but he fully embraces the Bohemian ideals of freedom, beauty, truth, and above all, love. The only problem, as he discovers, is that he has no idea what love is.
Fortunately, Christian is quickly acquainted with a group of Bohemian players who literally burst into his apartment. They are attempting to produce a theatrical production, "Spectacular! Spectacular!", which the Moulin Rouge's master Harold Zidler (Jim Broadbent) plans to put on at the cabaret. Unfortunately for them, the plot-line and lyrics to "Spectacular! Spectacular!" seem to have stagnated in their creative development, and the group is beginning to panic. When Christian suggests two or three changes to the script, the Bohemians are bowled over by Christian's natural talent for Bohemian poetry. The group agrees to add Christian to their group, and before the day is over, they take him to the Moulin Rouge (via the Green Fairy) in celebration.
While partying is its own justification to the Bohemians, their visit to the Moulin Rouge has a second motivation; they intend to present him to Satine, a beautiful courtesan and lead performer at the Moulin Rouge, in the hopes that she will be impressed with his talent and persuade Zidler to hire him as the play's writer.
Coincidentally, Zidler has selected the same night to introduce Satine to the Duke, whose wealth makes him the ideal financier for the production of "Spectacular! Spectacular!" and the conversion of the Moulin Rouge from a cabaret to a proper theatre. The lure for the Duke, as he explains to Satine, is two-fold: the profits made from the first production at the theatre, and exclusive retainer of Satine's services as the Duke's private mistress. To motivate Satine, Zidler capitalizes on her desire to become a dramatic actress, suggesting that becoming the Duke's mistress would pave the way for this career change.
However, it is Christian and not the Duke that Satine (mistakenly) takes to her chambers. After a comic set of misunderstandings, Christian summons his poetic gift and charms Satine. She declares that she has fallen in love with him, but is shocked to realize he is not the Duke she was set to seduce, but actually a penniless Bohemian poet/writer. ("Your Song")
Ewan McGregor and Nicole Kidman as Christian and SatineSoon after, the real Duke (Richard Roxburgh) arrives and finds Christian and Satine together. Christian's quick wit and Satine's charm fool the Duke into believing that they were rehearsing "Spectacular! Spectacular!" The main cast improvises the plot of the show on the spot: a beautiful Indian courtesan has her kingdom invaded by an "evil maharajah." She sets out to seduce him to save her kingdom, but accidentally seduces and then falls in love with a penniless sitar player. The two must hide their love and evade the maharajah, though it is implied that one of them may die at the end of the story. ("Spectacular! Spectacular!") On the strength of their proposal, the Duke agrees to financially support the show. However, in private with Zidler, he quickly reveals that he is a violently jealous man who will pull all finances and even close down the Moulin Rouge if he does not get Satine to himself.
Jim Broadbent as Harold ZidlerUnder the convincing pretense of writing and rehearsing for the show, Christian and Satine fall in love ("Come What May"), while Zidler struggles to keep the Duke interested even though Satine has not yet spent the night with him. Zidler also discovers that Satine is dying of tuberculosis, but does not tell anyone because "the show must go on." Meanwhile, Christian continues to develop the play, in which the courtesan and the penniless sitar player end up together. The Duke, however, belatedly realizes what has been happening. He demands a change of script, telling the cast that the courtesan must end up in the arms of the maharajah. To convince him to change his mind, Satine finally agrees to spend the night with the Duke. Christian is overcome with jealousy while Satine is alone with the Duke, who offers her a dazzling diamond necklace and everything of which she has dreamed. However, when Satine sees Christian on the street below, she refuses the Duke's offer and resists his advances. ("El Tango de Roxanne"). Enraged, he tries to take her by force, but Chocolat (a bouncer from the cabaret), rescues her. Satine and Christian plan to run away.
The Duke coldly informs Zidler that if the "maharajah" does not get his "courtesan," he will have the "penniless sitar player" killed. Zidler confronts Satine, who is not swayed by his arguments until he reveals that she is dying of tuberculosis ("The Show Must Go On"). To save his life, she goes to Christian and lies to him, convincing him that her love was an act and that she prefers the wealthy Duke to the penniless writer. Toulouse confronts Christian that Satine is his life, but Christian does not want to hear about this because he lost Satine, so he tells Toulouse to leave (faintly at first, then a third time, loudly which leaves Toulouse no choice).
As the show debuts, Satine is in poor health and can barely perform. When Christian, unwilling to give up on her, confronts her backstage, she tries to drive him off again, knowing he is putting his life in danger. Nevertheless, he follows her onto the stage, causing a brief moment of confusion before "the maharajah" (Zidler) declares he is the sitar player in disguise. Having pawned his typewriter, Christian throws the money at Satine's feet and storms off the stage. Toulouse saves the day by telling Christian that "the greatest thing you'll ever learn is just to love and be loved in return." Grieving, Satine confesses her love for him by singing their secret song. Christian returns to her, and they reconcile in full view of the audience and the Duke ("Come What May" Reprise). Enraged, the Duke attempts to shoot Christian, but is thwarted by Zidler. The audience applauds what they perceived as a good drama. Backstage, however, Satine is overcome by her illness and dies in Christian's arms. As her final wish, she asks Christian to tell their story, saying that if he does, she will always be with him.
A year later, still in his garret overlooking the now-deserted Moulin Rouge, Christian finally types the last page of his story. "A story about a time, a story about a place, a story about the people, but above all, a story about love, a love that will live forever."
