In 1928 Berlin, Franz Biberkopf is released after serving four years in Tegel prison for the murder of his girlfriend Ida. After settling into his old apartment, he visits Ida's sister Minna and rapes her. In a flashback, Franz kills Ida with a cream whip after correctly suspecting she's about to leave him. Franz encounters and drinks with old friend Meck, where he meets Lina Przybilla, a young Polish woman, who moves in with him. He receives notification from local police that he's barred from certain districts and surrounding municipalities, under threat of a fine or imprisonment. Placing himself under the supervision of a charity called Prisoners' Aid, to which he must report once a month while remaining in employment, Franz is able to stay.

Biberkopf is self-employed, hawking necktie holders on the street, but has trouble making enough and doesn't consider himself an orator. After turning down the opportunity to sell sex ed manuals, he's talked into selling the Nazi newspaper Völkischer Beobachter and wearing a swastika armband. In the subway, Franz is confronted by a Jewish man selling hot sausages, but denies being antisemitic, and Dreske with two other men also known to him. Dreske admires Lenin and the Soviet Union, but Franz responds by decrying revolution and 'their' Weimar Republic.

Troubled by the dubious nature of Franz's job, Lina introduces him to family friend Otto Lüders, who turns out to be an ex-con he knows from prison, but Franz thinks Otto is good. With him, Franz begins selling shoelaces. In the first apartment, he spends time with a widow whose deceased husband he closely resembles. Later, to Otto, he reports having sex with the widow. Otto visits the widow, expecting the same, but she feels threatened and rejects him. Otto demands money and steals from her. When Franz goes back to the widow, happily expecting another tryst, she slams the door on him. Franz vanishes.

Franz goes on an alcohol binge as former medical orderly Baumann searches for him in rooms in a building opposite the one occupied by the prisoners' charity on which he depends for his liberty in Berlin. Franz wanders the streets in a delirious state; outside a church he takes a coal delivery man for a pastor. When he comes round after another binge, Baumann tells him he has been lying in a stupor for three days. Franz now feels that neither God, Satan, angels or other people can help him.

Franz, after several fleeting encounters, has finally become reacquainted with his former pimp Eva, who feels a deep affection for him, and has paid the rent for his old rooms in his absence. Meck introduces Franz to Pums, the ringleader of an illegal enterprise, and his right-hand man Reinhold. Tired of his woman, Fränze, Reinhold wants Franz to take her off his hands. Franz has her come over and has sex with her. She returns to him after she's unable to find Reinhold. Reinhold then employs the same plan with his current woman, Cilly, whom Franz accommodates after provoking a row with Fränze.

Franz explains to Reinhold that he wants Cilly to stay with him. Franz gets sucked into Pums's gang when he is drafted for a job as a last-minute replacement for Bruno, who is beaten in the street. Franz serves as lookout as Pums, Reinhold, and Meck pull a robbery. In the getaway truck, Reinhold becomes suspicious of Franz because of a car seemingly following them, so Reinhold ejects Franz.

Franz has survived, but his right arm has been amputated. He recuperates for a time with Eva and Eva's lover Herbert, who agitates against Pums's syndicate, so the boss decides to take up a collection to help with Franz's medical costs. Franz goes to a red light district and encounters a pimp who offers a woman he calls the 'Whore of Babylon'.

Franz becomes involved in an illegal enterprise with Willy, whom he met at a cabaret. Eva and Herbert drop by to see Franz and bring a young woman, Emilie Karsunke, whom they offer as a new lover. Franz and the tender-hearted woman, whom he nicknames Mieze, fall for each other. However, their spell of love is broken when Franz finds a love letter from another man.

Eva explains to Franz that Mieze just wants to work to support him as Franz cannot due to his missing arm. After reconciling with Mieze, Franz attends a communist rally, during which he daydreams. The two meet Eva and Herbert, wherein Franz mockingly recounts the lessons he's learned about power and the state at the meeting, before more seriously soliliquising about the role of order and authority versus a more limitless power.

As Mieze cannot conceive, Eva tells her she'll have a child with Franz that Mieze can then raise. Mieze is delighted, to the point that Eva asks if she is a lesbian. Eva also tells Mieze she's concerned that Franz is getting into trouble with 'rogue' Willy, when he should be attending to those who took his arm. Franz listens as Willy espouses Nietzschean ideas while Max pleads with a Marxist to keep politics out of the bar. Franz drunkenly wanders the streets at night repeating snippets of the conversation before declaring he has no use for politics. Franz takes a taxi to the Tegel prison, where he falls asleep on a park bench before being accosted by a police officer and, now very drunk, making his way back home.

Franz tells Reinhold he wants to get involved with Pums again. Reinhold still has his suspicions but Franz is allowed to assist the gang with a job. Mieze is upset that Franz is earning money because she thinks Franz wants to be independent of her, but Franz reassures her. Franz brags to Reinhold about Mieze's devotion and decides to show him what a fine woman she is.

Franz introduces Mieze to Meck. Reinhold blackmails Meck to set up a meeting for him with Mieze. Meck takes Mieze on a drive to Bad Freienwalde and delivers her to Reinhold. Reinhold takes her for a walk in the woods, where she resists his advances. Mieze wants to know more about Franz, and Reinhold reveals it is because of him that Franz lost his arm. Mieze is horrified at this revelation. Reinhold strangles her and leaves her in the woods.

Franz tells Eva that Mieze has left him. Eva reassures him, though she is a bit concerned herself. A robbery pulled off by Pums' gang goes wrong and Franz takes Meck to his apartment to bandage his welding injury. Meck tells Franz that Reinhold is a bad guy, but Franz claims he has a good heart. Meck takes the police into the woods and helps them find Mieze's body, telling them he helped bury her. Eva brings Franz a newspaper that relates Mieze's murder; Franz lapses into demented laughter before vowing to kill Reinhold.

In a fantasy sequence, Franz walks along a street of the dead with two angels. He finds Mieze, but she disappears from his arms. Reinhold is in prison for the crimes committed by a man whose identity he has acquired. He is anguished that his cellmate and lover is being released. Franz is taken to an asylum. Much of the rest of the episode takes place in his imagination. Franz's being run over by the car is re-enacted with different characters taking on the roles of victim and driver. In a striking sequence, Franz and Mieze are treated like animals being slaughtered in an abattoir. On a nativity set, Franz is raised on a cross as the other characters watch. An atom bomb goes off in the background and the angels clear the dead. The surreal imagery ceases suddenly and Franz is at Reinhold's trial testifying to his good character. Reinhold is sentenced to ten years for manslaughter.