Parisian pantomimist Moreau is on the edge: he has started to drink, is suspicious of his young mistress, Michele, and has been reduced to performing in clown makeup in a nightclub frequented by the German military. Moreau dares transform one of his comic sketches into a mildly satirical sequence that ridicules the Nazi salute, and is arrested. Thinking he's a Jew, Moreau's Gestapo interrogator treats him roughly, until a higher-ranking SS officer, Steiner, initiates a newer tact; they want Moreau to perform in Terezin. Depressed and confused by what looks like a shabby provincial town, Moreau notes the odd conditions: a mass of fearful and ill-fed people, with a generous sprinkling of once rich and famous Jews whom he knows from the world of high culture.
Moreau learns about the ghetto--reserved for those Jewish prisoners deemed by the Nazis worthwhile enough to keep from shipment to the extermination camps--from street gamine Stella and her teacher, Vera, and decides to recruit as many Jews as possible for his performance, in order to save them from deportation. But he becomes aware that his performance is to serve as part of the Nazis' effort at deluding the expected visitors--the International Red Cross--into believing the Jews are sternly but justly treated. Commandant Gruber does the casting, although he pretends to Moreau that he is just a harmless bureaucrat balancing the population census. Moreau senses that the scales involve death, and proposes a Hansel and Gretel story that the Red Cross will remember. The play itself is strikingly done: the gingerbread house is revealed as a prison, and the children appear in their regular clothes--with Jewish star attached--before a hideous witch feeds them into the flames. Steiner is smart enough to applaud the performance, but makes sure Moreau and his colleagues are part of the next transport to the camps.