The film begins with a voiceover of Nick Carraway telling a doctor that his father always told him to see the good in others. It is here that we first hear the titular characters' name: Gatsby. Gatsby is apparently the only person in whom Nick has ever seen true good.
Nick then tells the viewer about his past. As the camera pans past the bustling crowds of New York City in the 1920s, Nick tells us that while he originally wanted to be a writer, at the time of his meeting Gatsby, he worked on Wall Street as a bond broker. Nick moves into a cottage on Long Island, next door to a giant mansion that belongs to Gatsby. He visits his cousin, Daisy Buchanan, who is married to the brutish and very wealthy former athlete, Tom Buchanan. Nick has dinner with Daisy, Tom, and their friend Jordan Baker, a professional golfer. Their dinner is interrupted when Tom gets a phone call from a woman with whom he is having an affair. When Nick goes home that night, he sees a figure in the gloom he believes is Gatsby, staring at a green light on the Buchanan's dock across the harbor.
Tom invites Nick to go to the Yale Club with him, but they end up picking up Tom's mistress, Myrtle Wilson, in a dingy neighborhood called the Valley of Ashes, and then going to an apartment that Tom keeps for Myrtle in Manhattan. There, they have a party. Nick has alcohol for the second time in his life, and enjoys the party, later waking up on his own porch, unsure of how he got back. He receives an invitation to go to one of Gatsby's parties, which are notoriously lavish affairs that attract a "who's who" of New York society.
Nick goes to the party, where he runs into Jordan Baker, and they speculate about Gatsby's true identity. After they meet Gatsby, he asks to have a private conversation with Jordan. Later, Gatsby invites Nick to go to lunch with him in New York. The following day, as Gatsby and Nick drive towards the city, Gatsby tells Nick about his past, but Nick doesn't quite believe he's telling the truth. They go to a speakeasy bar, where alcohol is served, and Gatsby introduces Nick to his business associate, Meyer Wolfsheim, who appears to be involved with some shady business deals. Later, Nick meets Jordan for a drink, and she tells him that Gatsby and Daisy know each other and were once in love. She then tells him that Gatsby wants Nick to invite him and Daisy over for tea, so that they can be reunited.
Nick invites Gatsby and Daisy over for tea the following day, and they meet. It is awkward at first, but they manage to get more and more comfortable with each other, and eventually become romantically entangled once again. At Gatsby's mansion, Daisy remembers her love for Gatsby, but laments the impossibility of their love. Nick then narrates that Gatsby was born to a poor farming family, but later encountered a wealthy man named Dan Cody, whom he rescued from a storm. Cody becomes a mentor to Gatsby, but after Cody died, Gatsby was cheated out of money that Cody left him by Cody's family.
Gatsby throws another party, which Daisy, Tom, and Nick attend. Daisy tells Gatsby that she wishes they could run away together, and Gatsby insists that she tell Tom she never loved him. Tom grows more suspicious of Gatsby's business dealings.
The following day, Nick, Daisy, Tom, Gatsby, and Jordan have lunch at the Buchanan estate. When Tom sees the spark between Daisy and Gatsby, he becomes infuriated and suggests they all go to the Plaza Hotel in Manhattan. Tom takes Gatsby's yellow car, driving Jordan and Nick, and Daisy and Gatsby drive Tom's car. When they stop for gas in the Valley of Ashes, Myrtle sees Tom driving the yellow car. Later, at the Plaza, Tom asks Gatsby prying questions about his past, claiming that he never went to Oxford, and humiliating him in front of Daisy. Gatsby tells Daisy to tell Tom that she has never loved him, but Daisy is uncomfortable and unwilling to do so. Tom provokes Gatsby when he suggests that Gatsby will never fit in with the wealthy. Gatsby becomes violently angry, nearly punching Tom, which horrifies Daisy.
Gatsby and Daisy drive home in Gatsby's yellow car. As they drive through the Valley of Ashes, Myrtle and George are having an argument. Myrtle runs out into the street and tries to stop the car, thinking it is Tom driving. The car hits her and kills her instantly. While Daisy and Gatsby stop for a moment, they quickly move on. Tom, Nick, and Jordan come upon the scene. Horrified to learn that Myrtle is dead, Tom tells George that it was Gatsby who killed Myrtle, and encourages him to take revenge.
Back at the Buchanan estate, outside in the garden, Gatsby reveals to Nick that Daisy was the one at the wheel when Myrtle was killed. When Nick spies on Daisy and Tom inside the house, he hears them planning to make some phone calls to the police and go away for awhile. Nick does not reveal Daisy and Tom's plans, as Gatsby says he will wait for Daisy to call him the following morning to make arrangements to run away together. After staying up all night and listening to Gatsby tell him his life story, Nick leaves Gatsby.
We see Nick at work, visibly distracted. Meanwhile, we see Daisy looking at her phone as she considers calling Gatsby. Gatsby goes for a swim in his pool to kill time while he waits for Daisy's call. The phone rings, Gatsby hears it, and excitedly begins to get out of the pool. However, he does not see George Wilson behind him, who shoots him in the back. He falls into his pool, dead, just as George turns the gun on himself. We then see it was Nick, not Daisy, who was calling. Daisy has chosen Tom.
Gatsby is blamed for the affair with Myrtle and her murder, and not a single person who came to his parties comes to his funeral. Nick is disgusted, and leaves New York. We see him put the final touches on a manuscript, Gatsby, which he re-titles The Great Gatsby.