German filmmaker G.W. Pabst and Hollywood expatriate Louise Brooks re-team after the success of Pandora's Box for the silent film Diary of a Lost Girl. On the day of her confirmation, innocent young Thymiane Henning (Brooks) is given a lockable diary as a present.
She's distraught because the housekeeper Elisabeth (Sibylle Schmitz) is leaving under curious circumstances and turns up presumably dead. Her duties are taken over by the conniving Meta (Franziska Kinz), who accepts the advances of Thymiane's pharmacist father (Josef Ravensky).
Trying to understand Elisabeth's fate, Thymiane agrees to meet her father's assistant, Meinert (Fritz Rasp). She passes out, he carries her up to her room, and by the next scene she has borne a child by him. Meta snoops in Thymiane's diary and finds out it was Meinert's baby, so she suggests they get married.
Thymiane refuses, so they throw her in a creepy reformatory for fallen women and leave her baby with a midwife. While in the reformatory, she meets Erika (Edith Meinhard), with whom she eventually escapes. To escape from poverty and homelessness, the girls then become nominal prostitutes in a brothel and are sexually liberated.