In 1938 Berlin, the wife (Gudrun Landgrebe) of a German diplomat (Kevin McNally) begins taking art lessons. She makes the acquaintance of another student, Japanese ambassador's daughter (Mio Takaki). Soon afterwards, the two women begin a passionate lesbian affair. This leads to a chain reaction of disaster and tragedy, culminating with the inevitable intervention of the Gestapo.

Despite the film's galloping sexual passions, The Berlin Affair is an exercise in aloofness, keeping the characters at arm's length-surprising, considering that the director was Liliana Cavani, auteur of the erotic classic The Night Porter (1974). The film was based on The Buddhist Cross, a novel by Japanese author Jun'ichirō Tanizaki.