Based on actual events, the story takes place in Berlin, in 1939, at the start of World War II. SS Officer Helmut Wallenburg (Helmut Berger) is instructed by his superiors to set up an elite brothel, the eponymous Salon Kitty, specially designed to serve high-ranking Nazi officials and foreign diplomats. In order to cater to the clients' darkest perversions and desires sufficiently, Wallenburg is also charged with finding and rigorously training twenty beautiful and intelligent women, who are not only dedicated to the ideals of National Socialism but are also prepared to perform the most extreme acts of debauchery imaginable.
What these prostitutes and their customers don't know is that the brothel is bugged and is being used to collect intelligence and to monitor the clients' loyalty to the Nazi Party and its cause. Wallenburg exploits his position, feeding his insatiable need to dominate and using the information he receives to blackmail his way to the top.
Meanwhile, one of the prostitutes, Marguerite (Teresa Ann Savoy), discovers the truth about the brothel when a soldier she loves is executed for revealing to her his plans to defect from the Party. With the help of the brothel's madam, Kitty (Ingrid Thulin), Marguerite plots to turn the tables on Wallenburg and exact her revenge...