Set in 1980s Berlin, the first part of the film is mainly in black and white. It follows two angels as they roam the city, unseen and unheard by the people, observing and listening to the thoughts of all they see. They have always been in Berlin; they have been in that location since before there was a city, possibly before there were any humans.
Although they are pure observers, incapable of any physical interaction with our world, one angel, Damiel, (Bruno Ganz) falls in love with a circus trapeze artist (Solveig Dommartin). Another section of the film follows an actor (Peter Falk) who has arrived in Berlin to make a film: it transpires that he was once an angel, and had renounced his immortal observing to become a mortal participant in the world. Eventually, Damiel too becomes a mortal human, being able to touch and fully interact with the world, (the film switches to colour at this point), and is finally united with the girl he had desired for so long.
The film won the prize for Best Direction at the 1987 Cannes Film Festival and was remade in 1998 as City of Angels, which was set in Los Angeles, California, and starred Meg Ryan and Nicolas Cage.