Jasmine Francis disembarks in San Francisco after a flight from New York City. She takes a taxi to her sister Ginger's apartment, where Ginger is dismayed to learn that Jasmine traveled first class despite claiming to be broke. Jasmine has recently suffered a nervous breakdown and, having incurred heavy debts, has been forced to seek refuge with her sister.
A series of flashbacks reveals that Jasmine's husband, money manager Hal Francis, was arrested for defrauding his clients. Ginger and her husband, Augie, were among Hal's victims; he swindled them out of $200,000 in lottery winnings that Augie had wanted to start a business with, and their marriage fell apart. Hal dies by suicide in prison after being publicly disgraced. Jasmine's stepson Danny subsequently dropped out of Harvard and severed all ties with Jasmine. Following Hal's death, Jasmine began drinking heavily and abusing anti-anxiety medication. She also developed a habit of talking to herself about her past.
Ginger is now dating a mechanic called Chili, whom Jasmine detests for his working class job and coarse manners. Jasmine considers becoming an interior designer because of her "great taste" and past experience in decorating her homes. She wants to take an online course as these are least expensive but having no computer skills, she decides to take a class in computers first. With no income, she grudgingly takes a job as a receptionist with a dentist, who harasses her with unwanted sexual advances. When he assaults her, she fights him off and quits.
Jasmine's situation improves when she meets a wealthy widower, Dwight Westlake, at a party in Marin County north of San Francisco. She attends by invitation of a friend at the computer studies class; her old friends are no longer in contact. Dwight is a diplomat aspiring to become a congressman. She poses as an interior designer, telling him that her husband was a surgeon who died of a heart attack, and adds that she has no children. Dwight is impressed by her stylishness and invites her to decorate his new home. Ginger begins a romance with Al, whom she met at the same party. She breaks up with Chili, who begs her not to leave him. Eventually, she discovers that Al is married and reconciles with Chili, realizing she has been influenced by Jasmine to believe Chili was beneath her.
Jasmine develops a romance with Dwight, and he is about to buy her an engagement ring, when they bump into Augie outside the jewelry store. Augie rails at Jasmine about the money Hal swindled from him. Augie also reveals that Danny is living nearby in Oakland and is now married. Dwight is outraged that Jasmine lied to him and calls off the engagement. Jasmine goes to Oakland and finds Danny, who tells Jasmine he never wants to see her again because of what she did to his father.
It is revealed that Jasmine finally learned of Hal's many affairs and confronted him. When he told her he wanted to divorce her to be with a 19-year-old au pair, Jasmine, rather than divorce him, called the FBI to inform the authorities of Hal's fraudulent business dealings, which led to his arrest.
Jasmine returns to her sister's apartment and finds Ginger back with Chili, who is now moving in. Jasmine and Chili needle each other, and Jasmine is furious when Ginger takes his side. Jasmine says she is going to marry Dwight and is moving out that day. She exits the apartment, walks to a park bench, sits, and begins muttering to herself.
