The film opens with an intersection between scenes of a warship with Admiral Croft and a carriage carrying Mr. Shepard and his widowed daughter, Mrs. Clay, to Kellynch Hall. Shepard and Clay are approached by creditors over the debts of the residence's owner, Sir Walter Elliot, while Croft discusses the end of the Napoleonic Wars with his navy comrades. Sir Walter, a vain, dapper baronet, is facing financial ruin. Although Sir Walter is initially opposed to the idea, he eventually agrees to move temporarily to Bath while Hall surrenders; the idea came from Shepherd, Lady Russell's family friend and Sir Walter's second daughter, the intelligent Ann Elliot.
Anne is visibly upset to learn that Admiral Croft, the son-in-law of Frederick Wentworth, the naval captain she turned down eight years ago due to his lack of prospects and connections, will be Kellynch Hall's new tenant. Wentworth had now made a fortune from his participation in the Napoleonic Wars and returned to England, presumably to find a wife. Anne later expresses her displeasure to Lady Russell at her family's current financial predicament and her past decision to turn down the captain's marriage proposal. Ann visits her younger sister Mary, a hypochondriac who is married to a local Musgrove farming family. Anne listens patiently to the various complaints confided to her by every member of the Musgrove family; this includes Mary's husband Charles, daughters-in-law Louise and Henrietta, and mother-in-law Mr. and Mrs. Musgrove.
Captain Wentworth comes to dine with the Musgroves, but Anne avoids going, volunteering to care for Mary's wounded son. At breakfast the next morning, Anne and Mary are suddenly briefly met by Wentworth, the first time he and Anne have seen each other since she rejected him. Anne later hears that Wentworth thought she had changed so much that she "wouldn't recognize [her] again". Louise and Henrietta begin to seek marriage to Wentworth as the family is unaware of his past relationship with Anna. Hurt and rejected by Anna's rejection years ago, Wentworth appears to be wooing Louise, much to Anna's chagrin. Wentworth is later told that Lady Russell also persuaded Anne to refuse Charles' marriage proposal, after which Charles proposed to Mary instead.
Anne, Wentworth and the younger Musgroves travel to Lyme Regis and visit two of Wentworth's old sea friends, Captain Harville and Captain Benwick. While there, Louise recklessly jumps down the high steps in the hope that Wentworth will catch her; he doesn't, and she gets a head injury. Afterwards, Ann goes to Bath to stay with her father and sister. Sir Walter and his eldest daughter Elizabeth recount that they have rekindled their relationship with a previously dubious cousin, Mr Elliot, heir to the baronetcy and the Elliot estate. Anne is introduced to him, and they realize that they briefly saw each other in Lyme. Much to Lady Russell's delight, Mr. Elliot begins courting Anna, but she remains unsure of his true nature. Meanwhile, Louise recovered and became engaged to Captain Benwick. Wentworth arrives in Bath and meets Ann several times, although their conversations are brief.
Anne learns from an old friend, Mrs. Smith, that Mr. Elliot is bankrupt and only interested in marrying Anne to secure his inheritance from her father. Anna is told that Mr. Elliot wants to prevent the baronet from marrying Mrs. Clay in order to produce a male heir. Soon after, Wentworth overhears Ann talking to Captain Harvill about the constancy of a woman's love and writes her a letter stating that he still cares about her. Ann quickly finds him and the two walk happily down the street, hand in hand. That night at the party, Wentworth announces his intention to marry Anna, much to Mr. Elliot's dismay. The final scene shows Wentworth and Ann on a warship, happy to be together.