NOTE: This spoiler was sent in by Beth who: "...loved this movie!"

East Berlin, late 1984. The writer Georg Dreyman attends the premiere of his new play, starring his girlfriend, the actress Christa-Maria Sieland. Also in attendance are two Stasi agents, Hauptmann Gerd Wiesler and his boss, Anton Grubitz. Also in attendance is Cultural Minister Bruno Hempf, who lusts after Christa. Dreyman is loyal to the East German state, not the least bit subversive (although some of his friends are considered subversive); therefore Stasi feels the need to investigate him (and hopefully provide dirt on Dreyman in order to ruin him so Hempf can have Christa for himself). After observing their general movements, Stasi moves in and bugs their apartment, right before Dreyman's birthday party. After their job is finished (in 20 minutes), Wiesler knocks on the door of Dreyman's neighbor, warning her not to say anything, that her daughter's position at university is at stake.

The listening post in the attic of the apartment building is manned by Wiesler and his assistant Udo. Two of Dreyman's birthday presents are opened: a book of poetry and some sheet music. Several days later, one of the party guests, Albert Jerska, commits suicide. He was a director who ran afoul of Hempf, and therefore can no longer find work in the GDR. After Jerska's funeral, Dreyman starts doing research on suicide statistics in the GDR, and finds out that those statistics haven't been compiled since 1977. Oh, and the poetry book has gone missing (Wiesler "borrowed" it). Wiesler is slowly discovering he is still human, and is altering the daily reports. Wiesler also gets Udo reassigned to another case. On his way home one day, a child gets on the elevator with Wiesler, asking him if he is a Stasi agent, that his father says that all Stasi agents are bad. Wiesler's first instinct is to ask the child the name of the father, in order to report him, but stops himself, and asks the child the name of his ball.

Paul Hauser, a reporter friend of Dreyman's, introduces him to an editor from from Der Spiegel magazine (who was tailed by Stasi when he entered East Berlin but managed to elude them), asking Dreyman to write an article on suicide in East Germany. Dreyman can't use his own typewriter to write the article because all typewriters are registered with the state; knowing this, the Spiegel editor smuggled in a portable typewriter under a cake. Dreyman finds a hiding place for the typewriter, under the floorboards, and cuts his hand on one of the nails. And while Dreyman is talking to Paul Hauser and the Spiegel editor about the article (in an apartment deemed "safe"), Wiesler's reports states that Dreyman is writing a play celebrating the 40th anniversary of the East German state. Upon publication, the article causes a major furor. Stasi gets a copy of the original typewritten pages, and analyze what brand of typewriter could have done it. Dreyman is an immediate suspect, but Stasi needs the typewriter for definite proof.

Christa is using drugs, and her source is finally located, and she is arrested and taken to Stasi headquarters, and she is pressured to reveal the hiding place of the typewriter. While Christa is in custody, Stasi does a thorough search of the apartment, but cannot find the typewriter.

After a night in Stasi custody, Christa is interrogated again, this time Wiesler is her interrogator. Christa recognizes him from an encounter in a bar, and realizes that she and Dreyman are in serious trouble. Christa marks on a floorplan of the apartment the hiding place of the typewriter. Grubitz arranges her release (he also gives her back the drugs, promising her easy access to them since she is now an informer). Wiesler manages to beat Christa (and Stasi) back to the apartment, in order to remove the typewriter from the hiding place. Stasi pries up the floorboards, and the typewriter is gone. Christa runs out of the apartment into oncoming traffic, killing herself. Grubitz confronts Wiesler, telling him that his career is over, that he will spend the rest of his career ("20 years") steaming open letters in the basement of Stasi headquarters.

Four years and nine months later, the Wall is down. All the workers in the basement of Stasi headquarters get up and leave. Two of them are Wiesler and a clerk who told a joke about Erich Honneker in the cafeteria.

Two years later (1991), and Dreyman's play is premiered in the West, the same play from the first scene of the movie. The staging is more avant garde than the conventional staging of 1984. Dreyman sees Hempf in the lobby and asks why he was never spied upon. Hempf tells Dreyman that he was spied upon, very thoroughly. Later, Dreyman heads over to Stasi headquarters and asks for his file. Dreyman gets a cart full of thick files, and he begins reading. At the end of "Project Lazlo", he sees a bloodstain on the page. Dreyman notices the abbreviation for each report, and asks the clerk at the front of the room for the name of the agent who wrote the report. He finds Wiesler, who is now a mailman. Dreyman follows Wiesler for a while, then drives away.

Two years later (1993), Wiesler is delivering mail, and walks past a bookstore. There is a large photo of Dreyman, who has written a novel, "The Sonata for a Good Man," the title of the sheet music Dreyman received for his birthday back in 1984. Wiesler flips open to the dedication page, and reads that the book has been dedicated to "AGW/XX7, with gratitude" the abbreviation on his Stasi reports.