The film is seen as heavily influencing a club scene that emerged in the early 2000s in Brooklyn, Berlin, Paris, and London called electroclash.
Amidst the bohemian new wave subculture of New York City in the early 1980s, an avant garde fashion show is to be held in a new wave nightclub in Manhattan. Among the models are bisexual Margaret (Anne Carlisle) and Jimmy (also played by Carlisle). Jimmy is Margaret's rival and nemesis. An apparent drug addict, he constantly hassles Margaret's heroin-dealer girlfriend Adrian (Paula E. Sheppard) for drugs but has no money to pay for them.
Before the show, Jimmy suggests to Margaret that they go to her place, but once there he only cares about finding Adrian's stash of heroin (known in New York in the '70s and '80s as liquid sky). An alien spacecraft — about the size of a dinner plate — lands on the rooftop of Margaret and Adrian's penthouse apartment. A tiny, shapeless alien watches the apartment from inside the UFO.
Adrian performs "Me and My Rhythm Box" at the club. Margaret and Jimmy return to the club to participate in the show. During preparations, both agree to a photo shoot the following night on Margaret's rooftop. They are assured there will be plenty of drugs available.
Margaret and Jimmy perform in the nightclub fashion show. Seeking cocaine, Margaret connects with Californian soap opera actor and son of a TV producer, Vincent (Jack Adalist) who is offering cocaine to all the women at the club. Back at Margaret's apartment she rejects Vincent when all he offers are Quaaludes, but he beats and rapes her.
Across town, middle class Katherine (Elaine C. Grove) revoices her objection to the heroin use of her boyfriend, failed writer and heroin addict Paul (Stanley Knap). German scientist Johann Hoffman (Otto Von Wernherr) arrives in New York, and secretly observes the aliens from the Empire State Building observation deck. At the apartment Paul buys heroin from Adrian, and tries to seduce Margaret.
Jimmy has lunch with his image conscious mother, Sylvia (Susan Doukas), a television producer. She tries to connect with him, but Jimmy's main interest is in obtaining money from her.
Johann needs somewhere to continue his surveillance of the alien when the observation deck closes. He seeks help from the only person he knows in America, college drama teacher Owen (Bob Brady). Owen fobs Johann off as he plans to go meet a former student, Margaret.
Seeking a vantage point on his own, Johann seeks access to an apartment building adjacent to Margaret's. This is Sylvia's building, and lascivious Sylvia, who happens to have a free evening, eagerly invites Johann to her apartment for dinner.
Margaret is seduced by her former acting professor Owen, a representative of the erstwhile hippie generation. He dies as they have sex in view of the aliens, with a crystal embedded in his head. Adrian returns and they clash over Margaret's dalliance with Owen. Adrian recites a eulogy, helps hide the body, and goes out to buy food for an impromptu wake.
Paul refuses to play host to Katherine's business clients at a party in her loft, claiming he feels sick. She angrily throws him out. Paul shows up at Margaret's while Adrian is out, and rapes her. He too dies, with a crystal protruding from his head. The aliens dispose of his body, which instantly disintegrates. An awed and grateful Margaret apparently believes it is the work of an "Indian" god possessing the Empire State Building.
From Sylvia's apartment, Johann intermittently continues his observation between dinner and dodging Sylvia's various attempts to seduce him. He leaves to warn Adrian when she buys provisions for the wake. Rebuked by Adrian, who thinks he is a narc, he returns to Sylvia.
The crew arrives at Margaret's apartment for the fashion shoot. During the shoot Margaret is taunted by Jimmy, so she agrees to give him oral sex, knowing it will kill him. Jimmy dies and the body evaporates as Paul's had. Adrian perversely encourages Margaret to have sex with her, and Adrian also dies. A vengeful Margaret applies new make-up, deserts the shocked crew and goes to a downtown nightclub. There she reconnects with Vincent, who previously raped her. Back at her apartment she seduces him, ensuring his death. Katherine arrives at the nightclub asking after Paul's dealer, Adrian.
Johann reveals that the alien is extracting the endorphins produced by the brain when an orgasm occurs — apparently a fatal operation. Johann resumes observation of Margaret's apartment and sees she is in mortal danger so goes to help her. He tells Margaret she survived because she never experienced an orgasm. Seeing the alien craft leaving, Margaret stabs Johann in the back and injects herself with heroin to induce a wild autoerotic orgasm to ensure the aliens take her with them. Sylvia and Katherine arrive at the apartment together and reach the penthouse in time to see Margaret vaporized by the aliens.Anne Carlisle as Margaret/Jimmy
Paula E. Sheppard as Adrian
Susan Doukas as Sylvia
Otto von Wernherr as Johann Hoffman
Bob Brady as Owen
Elaine C. Grove as Katherine
Stanley Knap as Paul
Jack Adalist as Vincent
Lloyd Ziff as Lester
Harry Lum as Chinese Food Deliveryman
Roy MacArthur as Jack
Sara Carlisle as Nellie
Nina V. Kerova as Designer
Alan Preston as Photographer
Christine Hatfull as Hair Stylist
Liquid Sky was produced and directed by Slava Tsukerman, who, prior to making Liquid Sky, had a successful career as a documentary and TV film maker in the USSR and Israel. The screenplay was written by Tsukerman, his wife and ubiquitous co-producer Nina V. Kerova, and Anne Carlisle, who also enacted the film's two leading roles. The director of photography, Yuri Neyman, a Russian émigré, was also the film's special effects expert. Anne Carlisle also wrote a novel based on the movie in 1987.
Although the film is loosely centered around early 1980s punk subculture, the film's score uses a series of strident synthesizer music pieces. The music was composed by Slava Tsukerman, Clive Smith and Brenda Hutchinson using the Fairlight CMI. Most of it was original, but included interpretations of Baroque composer Marin Marais's Sonnerie de Ste-Geneviève du Mont-de-Paris, Carl Orff's Trionfo di Afrodite, and Anthony Philip Heinrich's Laurel Waltz. All of these were orchestrated in a series of ominous, dissonant arrangements and nightmarish marches.
In a 2014 interview with The Awl, director Slava Tsukerman confirmed that a sequel, Liquid Sky 2, was in the works. Anne Carlisle would be returning in the sequel in the role of Margaret.Montreal World Film Festival – First Jury Award
Sydney Film Festival – Audience Award
Cartagena Film Festival – Special Jury Prize for Visual Impact
Brussels International Film Festival – Special Prize of the Jury
Cinemanila International Film Festival – Special Jury Prize
The film received a 94% Certified Fresh rating on review aggregate Rotten Tomatoes, 6.1 on IMDb (July, 2016), and 3/5 stars by editors and 4.5/5 stars by users on AllMovie.