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After a few words on the dangers of change from the world's oldest living Bolshevik, Perestroika picks up right where Millennium Approaches left off. Prior is in his bed with the angel hovering over him. He tells the angel to go away. The first act also reconnects with the play's other characters. Hannah, Joe's mother, takes care of poor Harper, who's having a really hard time with the fact that Joe left her for a man. Roy Cohn, dying of AIDS, checks into a hospital to meet his new nurse, Belize. And Joe and Louis finally consummate their relationship.
Act 2 is taken up by a big flashback sequence: Belize watches on as Prior relives his experience with the angel. Basically they have weird angel sex and she declares that Prior is a prophet who must go out into the world and stop mankind from growing, migrating and changing. All the moving around we human do has apparently led God to abandon the universe. The angel presses a sacred book, a tome of immobility, into Prior's chest to help him do the job. At the end of the flashback, Belize tells Prior that it was all just a dream and that it represents Prior's fear of the future.
Belize and Roy do a lot of arguing in the hospital, especially over the fact that Roy has scored a huge supply of AZT (a drug used to treat AIDS) that he doesn't want to share. The ghost of Ethel Rosenberg continues to haunt Roy, taunting him about how he may be disbarred. Harper continues to be all cracked up about Joe and spends a lot of time hanging out with Hannah at the Mormon Visitors Center. There she meets Prior and they watch an incredibly surreal version of the diorama presentation that depicts the history of Mormon migration to Utah. During the show, reality warps and both of them witness Joe and Louis in Brooklyn having an argument about Mormonism. By the end of the act, it looks like Joe and Louis are on the rocks, and Louis calls Prior to have a sit-down.
At the beginning of the act, Joe visits Roy in the hospital. Joe ends up telling his old mentor that he's been living with a man. Roy totally freaks out and sprays his infected blood all over Joe's shirt. Belize orders Joe out of the hospital room. Meanwhile, Prior and Louis' meet-up is less than civil, especially when Prior confirms that his vision of Joe was real. Prior and Belize stalk Joe at work, where Belize recognizes Joe from Roy's hospital room. Louis is horrified when Belize informs him of Joe's association with Roy. Prior collapses at the Mormon Visitors Center, and Hannah takes him to the hospital. Joe goes back to Harper and they have some bad makeup sex. Louis confronts Joe about his association with Roy and Joe's morally dubious lawyering. Their disagreement erupts into an all-out brawl, and Joe beats Louis up. As the act comes to a close, the ghost of Ethel Rosenberg informs Roy, just before he dies, that he's been disbarred.
In the play's final act, a very angry angel visits Hannah and Prior in Prior's hospital room. Prior wrestles the angel and gains access to heaven. Meanwhile, Belize drafts Louis to steal the now-deceased Roy Cohn's stash of AZT, but not without first saying the Kaddish, the Jewish prayer for the dead. Louis manages to say the prayer with the help of Ethel Rosenberg's ghost. In heaven, Prior confronts the angels and returns the book, making them see that human beings can't simply stop moving around. Prior wakes up in his hospital room to find Hannah, Belize, Louis, and a big bag of AZT. Harper slaps Joe across the face and finally ditches him, heading for San Francisco. In a similar vein, Prior tells Louis that he can't come back.
In a final epilogue, in front of the Bethesda Fountain in Central Park, the characters talk about how humanity can only progress.