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Act I
Rose and her two daughters, Baby June and Louise, play the vaudeville circuit around the United States in the early 1920s. Rose, the archetype of a stage mother, is aggressive and domineering, pushing her children to perform. While June is an extroverted, talented child star, the older girl, Louise, is shy. The kiddie act has one song, "May We Entertain You", that they sing over and over again, with June always as the centerpiece and Louise often as one of the "boys" ("Baby June and Her Newsboys"). Rose has big dreams for the girls but encounters setbacks, such as attempting to borrow money from her father ("Some People"). When Rose meets a former agent, Herbie, she persuades him to become their manager using her seductive and feminine wiles ("Small World"). The girls grow up, and June, now billed as Dainty June, and her act have a chance to perform for Mr. Goldstone of the Orpheum Circuit ("Mr. Goldstone, I Love You"). Meanwhile, Louise celebrates her birthday alone and asks her birthday present, a lamb, just how old she is this year ("Little Lamb"). After Rose rejects Herbie's marriage proposal, he considers leaving, but she asserts that he could never get away from her ("You'll Never Get Away From Me").
Now billed as "Dainty June and Her Farmboys", the act finally performs on the Orpheum Circuit ("Dainty June and Her Farmboys", “Broadway”). June is soon offered a place at a Performing Arts school after an audition. However, Rose turns this down, refusing to break up the act. Louise and June fantasize what life would be like if Rose were married and finished with show business ("If Momma Was Married"). A few months later, still on the road from show to show, Tulsa, one of the boys from the act, confides in Louise that he has been working on his own act ("All I Need Is the Girl"), and Louise fantasizes that she and he could do the act together. Shortly after, June is missing, and in a note, she explains that she has grown sick of her mother and the endless tour and has eloped with Tulsa, and they will do a new act. Rose is hurt, but then optimistically vows that she will make Louise a star, proclaiming that "Everything's Coming Up Roses".
Act II
Louise is now a young woman, and Rose has built a pale imitation of the Dainty June act for her. Using all girls, Rose and Herbie try valiantly to sell "Madame Rose's Toreadorables" to a fading vaudeville industry. However, they are still together ("Together, Wherever We Go"). With no vaudeville venues left, Louise and her second-rate act wind up accidentally booked at a burlesque house in Wichita, Kansas, as a means to deter police raids. Rose is anguished, as she sees what a booking in burlesque means to her dreams of success, but Louise persuades her that two weeks' pay for the new act is better than unemployment. As they are introduced to Louise, three of the strippers on the bill advise her on what it takes to be a successful stripper, a "gimmick," something that "makes your strip special" ("You Gotta Get a Gimmick"). Backstage, Rose proposes marriage to Herbie. He asks her to break up the act and let Louise have a normal life, and she reluctantly accepts, agreeing to marry the day after their show closes. On the last day of the booking, the star stripper in the burlesque show is arrested for solicitation. Desperate, Rose cannot resist the urge to give Louise another nudge toward stardom, and she volunteers Louise to do the strip tease as a last-minute replacement. Louise is sad at what she's being pushed to do for her mother's love and Herbie is disgusted at how low Rose has stooped and he finally walks out on her ("Small World" (Reprise)). Although reluctant, Louise goes on, assured by Rose that she needn't actually strip, but simply walk elegantly and tease by dropping a single shoulder strap. Shy and hesitant, she sings a titillating version of the old kiddie act song, "May We Entertain You?". She removes only her glove, but she speaks directly to her 'audience', which becomes her "gimmick" ("Let Me Entertain You" "(Gypsy Strip Tease)").
Louise becomes secure, always following her mother's advice to "Make 'em beg for more, and then don't give it to them!" The song becomes brasher and brassier, and more and more articles of clothing come off. Ultimately, Louise becomes a major burlesque star and does not need her mother any longer. Rose and Louise, who has become the sophisticated "Gypsy Rose Lee", have a bitter argument. Rose, feeling sad, useless and bitter, reveals that the true motivation for all her actions has been to live vicariously through her daughters, to chase the stardom she wanted for herself, not her children ("Rose's Turn"). She realizes that she has driven away June, Herbie, and now possibly Louise. She displays the talent that could have been under different circumstances, as the name "Rose" flashes in neon lights. After her admission to Louise, mother and daughter tentatively move toward reconciliation in the end.
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