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In the wake of their father's death, the Dashwood sisters, Elinor, Marianne, and Margaret, are left at the financial mercy of John, half-brother, and his greedy wife. Though their father asked John to take care of the girls and their distraught mother, the women end up getting seriously shafted – they're turned out of their family home, and basically left with a barely-respectable income to live on.
Left to their own devices, the ladies decide to move away to a cottage owned by a distant cousin in Barton Park, Devonshire. Before they move house, though, Elinor (the more practical sister) tentatively allows herself to fall in love with Edward Ferrars, the gentle brother of the girls' obnoxious sister-in-law. However, both of these young people are on the, shall we say, cautious side of the emotional spectrum, and the romance doesn't go anywhere. The Dashwood girls move away to their new home, leaving Edward behind.
In Devonshire, they find themselves in the company of the aforementioned cousin, Sir John Middleton, and his rather oddball family, comprised of a dully proper wife and a hilariously raucous mother-in-law, Mrs. Jennings. Also present is Sir John's good friend, Colonel Brandon, a thirty-something, somewhat stodgy, but good-hearted bachelor, who falls for young Marianne's girlish charms. The Dashwoods try make themselves at home in the cottage, but can't help but miss their childhood home. Marianne (the less-than-practical sister) is particularly blue – that is, until she develops a love interest of her own, a dashing young man named Willoughby. Everyone gets along with the new guy just swimmingly, and the whole family expects that Marianne and Willoughby will announce their engagement any day. Marianne is sure that she's found her soul mate.
Things start to go wrong fairly soon, though. Willoughby leaves rather suddenly for London, for reasons we're not entirely certain of, and doesn't give any indication of when he'll be back. Marianne takes this very hard, as she does everything. The plot continues to thicken with the arrival of an unexpected visitor – Edward Ferrars. He stays with his friends for a week, and all the while, everyone has a great time, even morose Marianne. However, Edward's departure heralds the arrival of another set of visitors, Mrs. Palmer, Lady Middleton's hyperactive sister, and her dour husband, Mr. Palmer. The Palmers just happen to live in the general vicinity of Willoughby's country home, and Marianne is eager for news of him – but there isn't any.
After the Palmers' departure, yet another wave of newcomers washes in… and this time, they're unwelcome ones. Mrs. Jennings invites some unknown relations of hers, Miss Steele and her younger sister, Lucy, to come and stay at Barton Park. To cut a long story short, Lucy Steele admits to Elinor that she's secretly engaged – to Edward Ferrars! Elinor is shocked and upset, and her hopes for the future all crumble before her eyes.
Both Dashwood sisters are now down in the dumps with regards to romance. At this low point, Mrs. Jennings asks Elinor and Marianne to accompany her to London for an extended trip, and after some squabbling, the girls accept. They embark upon their journey with mixed feelings – Marianne hoping to see Willoughby, and Elinor afraid that she'll run into Edward. Both of these things come to pass, but not in ways that the girls expect.
Willoughby avoids Marianne like the plague, despite many, many letters from her. When they finally meet at a ball (by accident), he evades her once again. Soon thereafter, Marianne receives a rather cold letter of dumpage from Willoughby, and she falls ill with the shock. Colonel Brandon, still carrying a torch for Marianne, is concerned, but also relieved – he finally tells Elinor the horrible truth about Willoughby, which he'd been concealing all along, thinking that Willoughby and Marianne were engaged. It turns out that Willoughby is a real cad; he got Colonel Brandon's adopted daughter pregnant, dumped her, and now is engaged to a super-wealthy socialite instead of Marianne.
Meanwhile, Elinor is forced to endure the company of her unwitting enemy, Lucy Steele, who's also in town. It seems that everyone is around – even the Dashwoods' brother, John, and sister-in-law Fanny (sister of Edward). To make matters even worse, Elinor finds out that Fanny and Edward's mother has decided that Edward must marry an heiress, a certain Miss Morton. It seems like nothing is going right for poor Elinor, but she tries to keep her emotions in check. However, Lucy and Edward's engagement comes to light, much to the dismay of pretty much everyone involved. The Ferrars are all in a fit about it, and Edward is in serious trouble. Distraught, Elinor eventually confesses everything to Marianne – that she's in love with Edward, but she's known for months about the secret engagement. Marianne instantly realizes that she's been too harsh on her sister; she used to berate Elinor for being too logical, but she sees now how much her older sis has been suffering.
It emerges that Edward has been cut out of the family fortune for his disobedient conduct, and that all of the money that was supposed to come his way has been given to his obnoxious younger brother, Robert. The sympathetic Colonel Brandon helps out by offering the young man a job as the curate at his estate, Delaford. It seems as though things have worked out for Edward and Lucy (though not ideally).
Disgruntled, the Dashwoods and Mrs. Jenkins leave town, and head out to the Palmers' country house, Cleveland. The party hangs out there for a while, but Marianne can't help but be upset by their proximity to Willoughby's ancestral home, Combe Magna. She catches a cold wandering around outside, and quickly becomes dangerously ill.
Everyone's in crisis mode because of Marianne's frightening illness – apparently, even Willoughby. He shows up, disheveled and distraught, having heard that Marianne is at death's door. He opens his heart to Elinor, explaining that the only reason he married someone else was because of money – basically, he screwed up a lot of things (namely, his relationship with Colonel Brandon's adopted daughter), and his mistakes ended up preventing him from marrying Marianne, his true love. He leaves, after being reassured that Marianne's on the mend. Elinor finally forgives him (kind of) for his dastardly deeds, and knows that this story will make Marianne feel better. Elinor and Marianne's mother arrives shortly thereafter, with dramatic news of her own: Colonel Brandon has confessed that he's in love with Marianne, and Mrs. Dashwood already regards their engagement as a foregone conclusion.
Marianne slowly gets better in the company of her mother, sister, and friends, and finally, the little family heads back home to Barton, where Elinor tells Marianne and her mother about Willoughby's true feelings. Everyone feels something akin to resolution, at long last. Elinor, however, is unsettled anew by a report that "Mr. Ferrars" is married to Lucy Steele. Happily, though, there turns out to be a miscommunication; the Mr. Ferrars in question is Robert, the younger brother, not Edward. Elinor receives this good news from Edward himself, who comes to finally ask her to marry him (yay!). In the end, that little minx, Lucy, managed to ingratiate herself with the new heir to the Ferrars fortune, and broke off her engagement with the no-longer-wealthy Edward.
In the end, everything works out – Lucy gets her rich husband, and Elinor gets the man she loves. Finally, Marianne finds her own happiness, too – she learns to love Colonel Brandon back, and the pair is married. After all the drama, both Elinor and Marianne end up with their happy endings.