Cheryl is a young, African American lesbian who works in a video rental store in Philadelphia with her friend Tamara. They earn extra money by making professional home videos for people. Cheryl becomes interested in films from the 1930s and 40s which feature black actresses. She notices that these actresses are often not credited. She watches a film called Plantation Memories with a black actress who is credited simply as "The Watermelon Woman". Cheryl decides to make a documentary about the Watermelon Woman and find out more about her life.
Tamara tries to set Cheryl up with her friend Yvette, but Cheryl is not interested. Cheryl meets a white woman in the store called Diana who, to Tamara's annoyance, flirts with Cheryl.
Cheryl starts interviewing members of the public, asking them if they have heard of the Watermelon Woman. She interviews her mother who does not remember the name, but recognises a photograph of her. She tells Cheryl that she used to hear the Watermelon Woman singing in clubs in Philadelphia. Tamara's mother tells Cheryl to get in contact with Lee Edwards a man who has done a lot of research into black films. Cheryl and Tamara go to see Lee, and he tells them about 1920s and 30s black culture in Philadelphia. He explains to them that in those days, black women usually played domestic servants.
Cheryl meets her mother's friend Shirley, who turns out to be a lesbian. Shirley tells her that the Watermelon Woman's name was Fae Richards, that she was a lesbian too, and that she used to sing in clubs "for all us stone butches". She says that Fae was always with Martha Page, the white director of Plantation Memories, and that Martha was a mean and ugly woman.
When Cheryl and Tamara get caught ordering video tapes under Diana's name, Diana takes the tapes and tells Cheryl that she will have to come to her home to collect them. Cheryl goes to Diana's house, stays for dinner, and watches some of the tapes with her, telling her about her project. They have sex, and Cheryl decides that although Diana is not her usual type of woman, she likes being with her.
Cheryl meets cultural critic Camille Paglia who tells her about the Mammy archetype, saying that it represented a goddess figure. Cheryl goes to the CLIT archive of lesbian material, and finds photographs of Fae Richards, including one given by Fae to a June Walker. With Diana's help, Cheryl manages to contact Martha Page's sister who denies that Martha was a lesbian.
As Cheryl and Diana grow closer, Tamara makes it clear that she dislikes Diana and disapproves of their relationship. She accuses Cheryl of wanting to be white, and Diana of having a fetish for black people.
Cheryl telephones June Walker, learning that she was Fae's partner for 20 years. They arrange to meet, but June is taken to hospital and leaves a letter for Cheryl instead. In the letter she says that she is angry with Martha Page, that Martha is nothing to do with what Fae's life was. She urges Cheryl to tell their history.
Having separated from Diana, and fallen out with Tamara, Cheryl finishes her project, never managing to make further contact with June.