Hedwig Robinson (John Cameron Mitchell) is the lead singer of a rock band called Hedwig and the Angry Inch, a virtually unknown outfit touring a chain of diners called Bilgewater’s. Hedwig is furious that her former lover, Tommy Gnosis (Michael Pitt), stole her songs and became a huge star. She is pursuing both a copyright lawsuit and Tommy himself: It just so happens that the Angry Inch’s small-time venues are in the same cities where Tommy is performing sold-out concerts.
Between songs, Hedwig harangues her meager audience with the story of her life. Through her narration and flashback, we learn that she grew up as a “slip of a girly boy” named Hansel in East Berlin, living in a small apartment with his domineering mother. Unable to find true love on that side of the Wall, Hansel dreamed of escaping to the West in the hope of finding his other half. Enter Luther (Maurice Dean Wint), an American serviceman who persuades him to undergo gender reassignment surgery so they can marry and move to the States.
Hansel’s mother arranges the operation with a shady doctor and the procedure goes badly wrong. Hansel is left disfigured with the titular angry inch, a mound of flesh “where [his] penis used to be, where [his] vagina never was.” Adopting his mother’s name, Hansel becomes Hedwig and moves to Junction City, Kansas, with Luther, but their marital bliss is short-lived. He leaves her for a younger boy, abandoning her in a dreary trailer park thousands of miles from home.
Alone and depressed, Hedwig finds empowerment in a blond wig and starts a band with several Korean army wives, still dreaming of finding her other half. That’s when she gets a babysitting gig and meets Tommy, a naive Christian kid, and the pair form an instant connection.