In 1935, Robert Lord produced the third lavish musical of the Gold Diggers series, the first having been the two-tone color feature Gold Diggers of 1929. Berkeley returned not only to stage the elaborate production numbers, but also directed the film. It was not his first stint as director, however, having shared that credit with George Amy on the forgotten comedy She Had to Say Yes (1933).

Dick Powell returned as well, to sweep yet another blonde off her feet. This time his love interest was Gloria Stuart, who would make an Academy Award nominated film comeback six decades later in Titanic (1997). Stuart plays the daughter of a fabulously wealthy widow (Alice Brady), whose incessant complaints about spending money provide a running joke for the film.

Gold Diggers of 1935 has long been criticized for having a 'thin plot'. But in truth, there are as many subplots and supporting players as Grand Hotel had the year before. The difference is that Grand Hotel was a drama, and had a cast loaded with stars. Gold Diggers of 1935 compares well with other popular musicals of the era, such as the Fred Astaire and Ginger Rogers vehicles.

The characters can be divided into three categories. The foolish rich are Alice Brady and snuffbox collector Hugh Herbert. They are prey for a set of con artists, notable among which is Adolphe Menjou as the imperious, corrupt stage director Nicoleff. The third category belongs to the young lovers, headed by Powell and Brady but also including comic relief skirt chaser Frank McHugh.

The moral of the film is that the crime of fleecing the rich does pay, which somehow slipped past the rigorously enforced production code.

Although the comedic subplots consume most of the celluloid, it would not be a Busby Berkeley musical without a few knockout production numbers. The most impressive features over fifty white pianos, each stationed with a smiling blonde pianist. The pianos are then shifted about on stage in synchronization, eventually forming a solid white platform. In a decade long before Industrial Light and Magic, one has to wonder, how did they do that?

Gold Diggers of 1935 is notable for introducing the song "Lullaby on Broadway", which won an Oscar for Best Song. It was the film's only Academy Award, although it was also nominated for Berkeley's choreography.