The ballet roughly follows the Hans Christian Andersen story upon which it is based. A young woman sees a pair of red shoes in a shop window, which are offered to her by the demonic Shoemaker. She puts them on and begins to dance with her boyfriend. They go to a carnival, where she seemingly forgets about the boyfriend as she dances with every man she comes across. Her boyfriend is carried away and nothing is left of him but his image on a piece of cellophane, which she tramples.
She attempts to return home to her mother, but the red shoes, controlled by the Shoemaker, keep her dancing. She falls into a netherworld, where she dances with a piece of newspaper which turns briefly into her boyfriend. She is then beset by grotesque creatures, including the Shoemaker, who converge upon her in a manner reminiscent of The Rite of Spring. They abruptly disappear, leaving her alone. No matter where she flees, the shoes refuse to stop dancing.
Near death from exhaustion, clothed in rags, she finds herself in front of a church where a funeral is in progress. The priest offers to help her. She motions to him to remove the shoes, and as he does so, she dies. He carries her into the church, and the Shoemaker retrieves the shoes, to be offered to his next victim.
Australian ballet star Robert Helpmann choreographed the ballet, played the role of the lead dancer of the Ballet Lermontov and danced the part of the boyfriend. Léonide Massine created his own choreography for his role as the Shoemaker. Brian Easdale composed the original music for the film, including the full ballet of The Red Shoes. Easdale conducted most of the music in the film, except for the Ballet of the Red Shoes, where Sir Thomas Beecham conducted the score and received prominent screen credit. Beecham's Royal Philharmonic Orchestra was the featured orchestra for the film. Easdale received the 1948 Academy Award for Best Original Score, the first British film composer so honoured.