Act One

Recent college graduate, Princeton, portrayed by a puppet and equipped only with hope and a Bachelor's Degree in English, is looking for two things: his life's purpose and an affordable apartment in New York City ("What Do You Do with a B.A. in English?"). On Avenue Q ("a homey, run-down street in an outer-outer borough"), he finds a building with a sign advertising "Apartment for Rent." He soon meets a motley but friendly assortment of neighbors, including Kate Monster (a kindergarten teaching assistant, also a puppet), Brian (an unemployed comedian, portrayed by a human actor), Brian's Japanese-American fiancée Christmas Eve (also played by a human), and bickering roommates, Nicky (a slacker puppet) and Rod (a straight-laced, Republican investor puppet). The superintendent of the building is none other than former child TV star, Gary Coleman (played by a human actor). Gary and all of the tenants each sing about their personal misfortunes ("It Sucks to Be Me"). Princeton rents an apartment and is welcomed to the neighborhood, and the stirrings of romance begin between Princeton and Kate Monster.

The next scene finds Rod in his apartment reading a book about Broadway musicals of the 1940s, when Nicky interrupts him and begins relating an anecdote about a gay man who was hitting on him in the subway. Rod immediately becomes uncomfortable, but Nicky assures him that he'd have no trouble accepting Rod if Rod were gay ("If You Were Gay").

The job that Princeton had lined up falls through. Gary Coleman helps convince him that his sudden unemployment is an opportunity to find his life's purpose. Princeton (with backing vocals provided by his moving boxes and other belongings) sings about his desire for a purpose ("Purpose").

Christmas Eve, Brian and Gary Coleman each briefly appear on a video screen and discuss their purposes in life. The screen goes dark and Princeton finds himself out on the Avenue, where he meets Kate Monster. Kate shares with Princeton her dream of creating a special school for monsters, where they can be educated without fear of discrimination. The two then exchange inadvertent racial insults, leading to the ensemble joining them to agree that they are all slightly racist ("Everyone's a Little Bit Racist").

Princeton is approached by the Bad Idea Bears, two adorable, snuggly bears who distract him from his quest to find his purpose, and instead convince him to spend his rapidly dwindling funds on a case of beer.

In her apartment, Kate receives a phone call from her unpleasant boss, Mrs. Thistletwat, informing her that Kate will have to take over the morning kindergarten class. Since Kate will be allowed to teach her class on the subject of her choice, she decides that she'll teach them about the Internet. Her perverted neighbor, Trekkie Monster, points out that the primary purpose of the Internet is to provide pornography. The other male characters all confirm this fact ("The Internet Is for Porn").

Rod approaches Christmas Eve for her advice on behalf of his "friend," who is a gay investment banker. Christmas Eve advises Rod to tell this person to stay in the closet. Rod is disappointed.

Princeton brings Kate a mix tape, confirming his romantic interest in her. He asks her to go with him on a date to the Around the Clock Café.

At the café, Brian performs an opening number ("I'm Not Wearing Underwear Today") before introducing Lucy the Slut, a seductive puppet who performs a sultry song ("Special").

Kate initially declines to drink because she's got a big day of teaching tomorrow, but the Bad Idea Bears arrive and convince Princeton and Kate to enjoy some Long Island Iced Teas. Lucy the Slut starts hitting on Princeton until an increasingly tipsy Kate intervenes.

Later that night, Kate and Princeton are having sex in Princeton's bedroom. Brian and Christmas Eve are also having sex in their apartment. The lovemaking becomes quite noisy, but Gary Coleman and the Bad Idea Bears assure us that this is just as it should be ("You Can Be as Loud as the Hell You Want When You're Makin' Love").

In Nicky and Rod's apartment, Rod dreams that he overhears a sleeping Nicky mumble that he is in love with Rod. Rod is overjoyed ("Fantasies Come True") until he awakens and realizes that Nicky's love was only a dream.

Meanwhile, Princeton gives Kate his lucky penny as a token of his commitment to her.

The next morning, we learn that Kate has overslept and missed her class. When Mrs. Thistletwat calls and states that she "should never have hired a Monster," Kate quits her job before she can be fired. Princeton asks Kate to accompany him, as his girlfriend, to the wedding of Brian and Christmas Eve. She agrees.

Gary Coleman presides over the wedding. After the ceremony, Christmas Eve and Gary ask Nicky if Rod is gay. Nicky confirms that he believes that Rod is indeed a "closeted homosexual." Rod overhears this and is furious, protesting that Nicky is wrong about him ("My Girlfriend Who Lives in Canada"). Rod kicks Nicky out of their apartment.

The wedding makes Princeton anxious about the fast pace of his relationship with Kate. He abruptly breaks up with her. Kate is hurt, but salvages her pride ("There's a Fine, Fine Line").

Act Two

Two weeks later, Princeton is moping in his apartment, alone, unemployed, in mounting debt and no closer to finding his life's purpose. The Bad Idea Bears arrive and attempt to convince him to hang himself, but he rebukes them. The neighbors arrive to cheer Princeton up ("There is Life Outside Your Apartment"). Princeton meets up with Lucy the Slut and takes her back to his apartment.

Princeton and Lucy encounter Kate in front of the building. Kate is jealous and crushed. Christmas Eve explains to Kate that love isn't easy ("The More You Ruv Someone").

Kate leaves a note for Princeton, inviting him to meet her at midnight on the viewing platform at the Empire State Building. Unfortunately, Lucy intercepts and destroys the note.

Meanwhile, Nicky has been staying with various neighbors since Rod kicked him out, but has now worn out his welcome with all of them. He asks Gary Coleman to let him sleep on his floor, but Gary refuses, explaining that everyone takes a measure of comfort from the misery of others ("Schadenfreude").

Kate waits for Princeton on the observation deck of the Empire State Building. On the street below, Lucy informs Princeton that she is no longer interested in him. Angry because she believes Princeton has stood her up, Kate throws his lucky penny off the observation deck. It plummets to the street below and strikes Lucy in the head, knocking her out cold.

The scene shifts to a hospital, where Princeton and Kate anxiously await word on Lucy's condition. Lucy is still unconscious. Kate realizes that Lucy must have intercepted her note and that Princeton did not stand her up. Kate confesses that she has abandoned her dream of starting a school for Monsters. Princeton apologizes for hurting Kate's feelings and tells her he still hasn't found his purpose in life.

Nicky, now homeless and begging in the street, attempts to reconcile with Rod. Rod is too proud to accept his apology, but later admits to Christmas Eve that he misses Nicky.

All of the characters express their longing to return to happier times ("I Wish I Could Go Back to College").

Nicky, still begging in the street, asks Princeton for a quarter. Princeton turns him down, telling him that he needs a moment for himself. Nicky tells him that he should start thinking about other people for a change. Inspired by this idea, Princeton decides to raise money for Kate's Monster school ("The Money Song"). The help of the entire neighborhood is enlisted in fund raising, including Trekkie Monster, who donates millions of dollars he has raised (by investing in pornography) because the cause of a school for Monsters is close to his heart. Nicky decides to find a boyfriend for Rod.

The neighbors present the new school to Kate, who is delighted. Christmas Eve and Brian announce that they are moving out of Avenue Q for a nicer neighborhood. Brian reveals that he has begun a new career as a consultant. Rod announces that he is gay and invites Nicky to move back in with him. Nicky reveals that he has found a boyfriend for Rod and introduces Rod to Ricky (who looks exactly like Nicky, but is gay).

Christmas Eve reveals to Kate that it was Princeton who spearheaded the fund raising drive. Princeton and Kate begin their reconciliation ("There's a Fine, Fine Line – Reprise").

A Newcomer arrives, expressing interest in renting the apartment being vacated by Brian and Christmas Eve. He is strikingly similar to Princeton ("B.A. in English – Reprise"). Upon seeing the Newcomer, Princeton exclaims that his purpose in life might be to create a show to educate people like the Newcomer about what's in store for them. The others reject this notion immediately, and the Newcomer is insulted by the very idea and storms off. Princeton laments that he may never find his purpose, but the neighbors reassure him that life has its ups and downs and is always full of surprises ("For Now").