Kuhle Wampe takes place in early-1930s Berlin. The film begins with a montage of newspaper headlines describing steadily-rising unemployment figures. This is followed by scenes of a young man looking for work in the city and the family discussing the unpaid back rent. The young man, brother of the protagonist Anni, removes his wristwatch and throws himself from a window out of despair. Shortly thereafter his family is evicted from their apartment. Now homeless, the family moves into a garden colony of sorts with the name “Kuhle Wampe.”

A sensitive girl is sent to an all-girls boarding school and develops a romantic attachment to one of her teachers.

The two main people in the story are Anna, a young girl, who is thought of having the ability to heal people mysteriously. Elisabeth is a young - middle aged aristocratic woman, that is disabled and puts all her hopes in meeting Anna and having her disability heal by her. A strange ambivalent relationship develops between the two women.