The lives and dramas of the clientele and staff at the Bluejar bar in Manhattan intersect on Christmas Eve 1971. The bar is run by Louis Barone, a small-time mafiosa who pays bribes to corrupt cop Pete Thomas so the bar doesn't get raided. Barone also lends money, with extorionate interest rates to patrons, including the extremely camp Kenny. Barone is straight and doesn't mind gay guys, apart from Leo, an Italian bisexual actor who can't keep away from the bar even when he has a woman in his bed. Barone feels that Leo reflects badly on Italians. During the film Leo befriends and then picks up a handsome young newbie from Nebraska, and they leave together at the end, Leo seeming to have made a choice.
Two colourful women work at the bar: Sadie who has recently recovered from an operation, and towards the end of the film makes a speech where she calls the patrons of the bar her family. Helen acts as a motherly figure to the men, as well as entertaining them by singing Frankie and Johnny.
A number of storylines involving different groups of characters develop as the film goes on.
Lita Joyce is a 'fruit fly', an insecure woman who hangs around gay men because they are not sexually threatening. She is jealous of pilot Scott's relationship with artist Terry Nabour. In an early scene, Terry tells a story about how his prudish mother was shocked when she visited him at his studio when he was photographing a nearly-naked woman. Lita Joyce telephones Mrs Nabour and "outs" Terry to her. At the end of the film Mrs Nabour arrives at the bar and disowns Terry publicy. Terry is devastated but embraces Scott. Lita Joyce, on seeing the effect of her phone call, looks unhappy and leaves.
Michel is a French ski instructor, recovering from a skiing accident, and in love with older married man, Barratt Arden. At the start of the film, Barratt has cut his hand on a glass when attempting to snatch away a matchbox with the Bluejay's name on it, so it can't be seen by his female friend. Michel spends the film trying to convince Barratt to leave his wife and be with him. Barratt refuses and leaves the bar, but returns at the end to be reunited with Michel, who is drunk and passed out.
Marvin Hocker is an older man who is taking his "nephew" Jim on a holiday to Europe. Jim is a hustler who gets drunker as the film goes on, and eventually gets stoned. Hallucinating, he asks Karen, a lonely young woman who acts like a 1930s movie star for a dance. Karen fantasises that everyone thinks she is beautiful, but in reality she is handled roughly by Jim during the dance. As he gropes her he discovers that she is actually a man, and then he violently assaults her. The cop Pete Thomas wants to arrest Jim, but Marvin pays him off. Jim leaves on his own, having stolen the plane tickets.
Karen, now out of drag, is called Harry. He is consoled by religious Howard, who plucks up the courage to invite Harry home. Harry suddenly asks the time and then leaves when he finds out it is two in the morning. At the end of the film, we see Harry/Karen being dominated outside the bar by the hypocritical cop Pete Thomas who is in a sexual relationship with him. Comic relief in the film is provided by Miss Untouchable, who arrives in a cape and never speaks, and the Perfume Queen who has arranged a date with a straight man he's been dating via telephone, who thinks she's a woman. Another character called Giggling Gertie is a middle-aged man who screams with laughter at everything.