Witty Ruth (Betty Garrett) and pretty Eileen (Janet Leigh) Sherwood, sisters from Columbus, Ohio relocate to New York City and settle in a rundown basement studio apartment in a Greenwich Village building owned by Papa Appopolous (Kurt Kasnar). Ruth aspires to be a writer, while Eileen hopes to achieve success as an actress. They become acquainted with their neighbor Ted Loomis (Dick York), an athlete who lives with his fiancée Helen (Lucy Marlow).

Ruth has a letter of introduction to Bob Baker (Jack Lemmon), editor-in-chief of Mad Hatter magazine. As he rushes off for vacation, he counsels her to write about things she knows rather than the artificial stories she had sent him.

Meanwhile, after finding herself the target of unwanted advances from a Theatre producer, Eileen goes to the local Walgreens for lunch. Soda fountain manager Frank Lippencott (Bob Fosse) lends her a sympathetic ear and offers his assistance, assuring her many theatrical people eat at the counter.

As time progresses, Ruth collects a lot of rejection slips and Eileen fails to secure any auditions. When newspaper reporter Chick Clark (Tommy Rall) overhears Frank telling Eileen about an audition, he claims to know the show's producer and assures her he can get her an interview with him. Upon arrival at the theater, they discover it is a burlesque house where striptease is the main attraction. Mortified, Eileen rushes out.

Bob returns from vacation and meets with Ruth to tell her his favorite stories are about Eileen and her romantic misadventures. Ruth claims her sister is simply a product of her imagination and the experiences she described actually are her own. Intrigued, Bob asks her for a date, but Ruth declines, and later tells Eileen she finds him dull and unattractive.

Ted asks the girls if he can stay with them while Helen's mother visits and Eileen agrees despite Ruth's uncertainty. Eileen invites Chick and Frank to dinner, but when a plumber ruins her spaghetti sauce, Chick suggests they go to El Morocco, where he tells Eileen he will introduce Ruth to his editor, and Ruth sees Bob with a glamorous woman.

Bob's secretary is certain Ruth's stories are not as autobiographical as she claims. He invites her to dinner to discuss the publication of a story, and when he tries to kiss her she runs off, suggesting she may be less experienced than her stories suggest. Eileen tells Frank unless Ruth's story is published, the impoverished sisters will have to return to Ohio. Frank is in love with her but, mistakenly thinking Ted lives with the girls, accuses Eileen of being a bohemian and departs.

The following day, Ruth receives a phone call asking her to cover the arrival of the Brazilian Navy the local paper. Unaware it was Chick who made the call, in order to ensure being alone with Eileen, she rushes off. Chick comes to the apartment and is thrown out by Ted when Eileen needs help fending off the reporter's advances. Helen sees Ted comforting Eileen and mistakenly assumes the worst.

The Brazilian naval cadets, who have misunderstood her intent in meeting their ship, pursue Ruth. In order to calm them down, Ruth and Eileen initiate a Conga line, which rapidly evolves into a wild dance party in the street that draws the attention of the police, and everyone is arrested. The Brazilian Consul intervenes on their behalf, and the girls return home to pack their belongings. Bob arrives at the apartment, professes his love for Ruth, and tells her he is publishing her stories. Frank arrives with a box of chocolates for Eileen, Ted and Helen reconcile, and the sisters decide to remain in New York.

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The background for “My Sister Eileen” is a story unto itself. It originated as a series of short autobiographical stories published in The New Yorker, then collected and published as the book My Sister Eileen in 1938, by Ruth McKenney that eventually evolved into a book, a play, a musical, a radio play (and unproduced radio series), two films, and a CBS television series in the 1960-1961 season.

The stories were adapted for the stage by Joseph Fields and Jerome Chodorov. The Broadway production, directed by George S. Kaufman, opened on December 26, 1940 and the opening night cast included Shirley Booth as Ruth and Jo Ann Sayers as Eileen, with Richard Quine and Morris Carnovsky in supporting roles. Unfortunately, Eileen McKenney, the inspiration for the title character, and her husband, novelist and screenwriter Nathanael West, were killed in a car accident four days before the Broadway opening, as they traveled to New York to attend the play's premiere.

Then in 1942, Fields and Chodorov adapted their play for a film released by Columbia Pictures. Alexander Hall directed a cast that includes Rosalind Russell as Ruth and Janet Blair as Eileen, with Brian Aherne, George Tobias, Allyn Joslyn, Elizabeth Patterson, Grant Mitchell, and Richard Quine in supporting roles. Then in 1953, “Wonderful Town”, with lyrics by Betty Comden and Adolph Green and music by Leonard Bernstein, became the hit musical stage adaptation of “My Sister Eileen”. Rosalind Russell reprised the part of Ruth for the Broadway production and also appeared in a CBS Television broadcast of the musical in 1958.

Its success on Broadway prompted Harry Cohn, head of Columbia Pictures, to seek the film rights to the musical version. When they proved to be too costly, he decided to hire Jule Styne and Leo Robin to write a different score. Because the film couldn't bear any resemblance to “Wonderful Town”, a studio attorney was assigned to make sure there were no similarities between the two. Even the musical numbers had to be positioned at different places in the storyline.

Screenwriter/director Richard Quine, who had portrayed Frank Lippincott in the 1940 stage play and the 1942 screen adaptation, originally, cast Judy Holliday in the role of Ruth Sherwood. But when the actress got into a contract dispute with the studio, Betty Garrett replaced her. This was Garrett’s, (who had been essentially, but not officially, blacklisted due to her marriage to Larry Parks, a one-time member of the Communist Party), first screen appearance since “On the Town” with Gene Kelly and Frank Sinatra six years earlier. Bob Fosse, who also played Frank Lippincott in the film, choreographed the fantastic musical numbers. Bosley Crowther of the New York Times wrote:

"Happily let it be stated that Miss Garrett and Miss Leigh are okay. In fact Miss Garrett is okay in shining letters . . . [She] has the proper skepticism and the right desperation for the role. Her way with a line is homicidal. What's more, she can dance and sing. These are essential talents in this production, in which Miss Leigh . . . is particularly nimble on her legs — and for which Mr. Styne and Mr. Robin have dished up some apt and lively songs . . . But it is Jack Lemmon . . . who generates the most amusement and upholds the tarnished dignity of males. Mr. Lemmon is a charming comedy actor, getting more so in each successive film. And his off-hand maneuvering around Miss Garrett to shatter her resistance is grand. When the two, in a scene of mad seduction, sing "It's Bigger Than You and Me," the breadth of the spoof is established and the high point of the comedy is reached."

Basically, this is one of the most entertaining musicals to ever come out of Hollywood, light and witty, sweet and subtle. The songs are a joy, the dancing a treat and the story deliciously simple. Janet Leigh and Jack Lemmon shine, but the true star is the glorious Betty Garrett.