Even though Lili Marleen's events take place right before, during and up to the end of World War II, it is a movie centered around people and their feelings in typical Fassbinder fashion.
It is the story of Willie (played by the stunning Hanna Schygulla) and with her the story of Nazi Germany that follows a similar trajectory. She is a German that tries to make a living in Zurich as a singer/cabaret artist and falls in love with Robert (Giancarlo Giannini), a Jew and member of the anti-Nazi resistance camp. His family doesn't approve of their relationship, because she is German/Aryan and make sure they go their separate ways after her deportation. Back in Germany, she must find a way to survive and, seemingly out of nowhere, her song "Lili Marleen" becomes a monumental hit, a source of inspiration and courage for every German soldier, which brings Willie in a tricky spot, as it becomes harder and harder to maintain the balance between collaborating with the Nazis in an artistic level and taking part in the resistance against them all the while hoping for a reunion with Robert which seems more and more unlikely.
An interesting element of the movie is that it presents both sides in a nuanced way, it avoids portraying the Nazis as the one-dimensional caricature villains. It also shows how thin the lines are and how hard it can be to fight prejudice and shake off a social or political stigma.
And of course the song itself deserves its legendary status.