New York City. 1999. The womanizing Sebastian Valmont (Ryan Phillippe) is with his therapist Dr. Greenbaum (Swoosie Kurtz) to talk with her over his sexual urges over other women. Sebastian decides that he is more or less cured and bids goodbye to him to set out as a new man. She thinks she has convinced him of sustaining longer and more serious relationships with girls. After Sebastian leaves her office, Dr. Greenbaum gets a phone call from her distraught daughter Marci (Tara Reid) who claims that her boyfriend just broke up with her and posted a nude photograph of her on the Internet. Dr. Greenbaum realizes that Sebastian is the guy whom Marci is talking about and she chases after him and yells at him for violating and corrupting her daughter in front of a small crowd. Sebastian slyly denies knowing who Dr. Greenbaum is and leaves, only stopping to pick up another young woman.
Kathryn Merteuil (Sarah Michelle Gellar), the image of social perfection, takes the sheltered and naive Cecile Caldwell (Selma Blair), under her wing, promising to turn Cecile into a model student like herself. Kathryn's real intention, however, is to take revenge on Court Reynolds, Kathryn's own ex-lover, who dumped her for the "innocent little twit", Cecile. Kathryn intends to corrupt Cecile by getting her to sleep with as many men as possible, thereby destroying her reputation and teaching Court a lesson.
Kathryn asks for help from her step-brother, who happens to be Sebastian. Though Kathryn and Sebastian have collaborated in schemes of manipulation before, he initially refuses. He is busy planning another "conquest", the beautiful Annette Hargrove (Reese Witherspoon), a girl who has published a manifesto saying that she plans to keep her virginity intact until she gets married. Annette is the only daughter of the new headmaster at their prep school Manchester, which is currently closed for the summer season. Sebastian learns that Annette will be staying with his aunt Helen Rosemond (Louise Fletcher) in the Hamptons on Long Island and Sebastian hopes that it will be a perfect opportunity to seduce Annette.
Kathryn doesn't think Sebastian has a chance with Annette, so they make a wager. If Kathryn wins, she gets Sebastian's vintage Jaguar, a 1956 XK140 Roadster; if Sebastian wins, she offers him a night of passion with her, as she is the only girl Sebastian cannot bed. Sebastian initially rejects this deal, being very enamored of his car, but relents when Kathryn ups the ante, telling him that he can "put it anywhere."
Meanwhile, Ronald Clifford (Sean Patrick Thomas), Cecile's music teacher for the summer, is also smitten with Cecile, and Kathryn makes arrangements for Ronald and Cecile to spend time together, hoping that he will take Cecile's virginity.
On Long Island, Sebastian has a hard time seducing Annette when they first meet. Through they have chemistry, she sees right through him and rejects his advances claiming that she knows that he seduces and corrupts young women for his own twisted enjoyment.
Shocked and angry by Annette's rejection of him, Sebastian confides in a Manchester Prep student Blaine (Joshua Jackson) about Annette's knowledge about his past. Blaine suggests that Annette's ex-boyfriend and Blaine's current lover Greg McConnell (Eric Mabius) may have accused him. After a confrontation later that same night, where Sebastian threatens to reveal Greg's homosexual relationship with Blaine, Greg denies that he told Annette anything. Seeing that Greg has no reason to lie, Sebasian then tells Greg to find out who has been bad-mouthing him to Annette while telling him to tell Annette a fabricated story about his good intentions.
Later, Sebastian learns from Greg that Annette has been forewarned of his libertine ways by none other than Cecile's mother, Mrs. Bunny Caldwell (Christine Baranski). Wanting revenge, Sebastian returns to New York and re-joins Kathryn in her plans to corrupt Cecile.
Kathryn engineers Ronald's break-up with Cecile by informing Mrs. Caldwell of their flirtations; Mrs. Caldwell quickly ends their affair and fires Ronald as Cecile's music teacher. Sebastian, in turn, calls Cecile to his house, ostensibly to give her a letter from Ronald. Once at his house, Sebastian blackmails Cecile and convinces her to have oral sex. The next day, Cecile confides in Kathryn, who advises her to learn the art of sex from Sebastian so that she can make Ronald happy in bed.
Meanwhile, Sebastian continues his quest of Annette by continuting to put on a compasionate facade to discredit his bad-boy reputation. He tells Annette that he thinks of other people and demonstrates by volunteering at a hospice care facility where she also volunteers. He also gives money donations to charity groups knowing Annette is observing him which is also a part of his ploy to get back on her good graces.
Over the next few days, Sebastian begins to fall in love with Annette, who returns his feelings but still keeps her defenses up. Sebastian declares that Annette is a hypocrite, waiting for love but refusing to sleep with the guy that loves her. Confused and beaten by Sebastian's logic, Annette relents, but Sebastian, now feeling guilty for leading her on, refuses her. Heartbroken and embarrased, Annette flees his aunt's estate. Sebastian tracks her down at her parents hotel suite in New York and professes his love, and they consummate their feelings.
Kathryn offers herself to Sebastian the next day, since he has won the bet, but he refuses; his romantic focus is now on Annette. Kathryn taunts Sebastian for having gone soft, then convinces him that his love for Annette is nothing more than a infatuation. Kathryn threats to ruin Annette's reputation unless Sebastian breaks up with her.
Swayed by Kathryn's threat, Sebastian coldly breaks up with Annette and returns to Kathryn. Kathryn, however, now refuses to sleep with him. After Sebastian tells Kathryn that he has arranged for Cecile and Ronald to be together, Kathryn reveals that she has known all along that he was truly in love with Annette, yet she manipulated him to give it up. While Sebastian may have initially won the bet, she made him lose his first true love, and she (Kathryn) does not sleep with "losers." Sebastian, hurt and angry, leaves and declares war on Kathryn.
After trying unsuccessfully to talk to Annette, he sends her his journal, in which he has detailed all his previous "conquests" and written his true feelings for Annette. He wants to offer the diary to Annette, hoping she will learn the truth for herself and forgive him.
Kathryn, meanwhile, informs Ronald of Sebastian's affair with Cecile; Kathryn also claims that Sebastian had hit her (in a deleted scene Sebastian indeed slapped Kathryn). A furious Ronald confronts Sebastian in the middle of the street outside Annette's apartment building and a fist fight ensues. Annette, in search of Sebastian, comes upon the fight and tries to stop it. She is thrown into the way of an oncoming taxi cab. Sebastian pushes her to safety and is hit by the speeding cab himself. Annette rushes to his side. Before he dies, he professes his love for her, and she reciprocates.
A few weeks later, the new school year at Manchester Prep is inaugurated with Sebastian's funeral. During the service, Kathryn gives a self-sufficient speech to the school about how she had unsuccessfully tried to get Sebastian to mend his ways and become a model student like herself. Halfway through her speech, students start walking out. Flustered, Kathryn rushes outside the chapel, where Cecile is distributing copies of Sebastian's journal (entitled Cruel Intentions) to all the students. The journal shows all of Sebastian's inner thoughts: his conquests, his description of the bet, and a page on Kathryn, which finally exposes her manipulative and deceitful ways, including the fact that she hides a vial of cocaine in a crucifix she wears in the rosary beads around her wrist. The headmaster takes Kathryn's crucifix and opens it, spilling the cocaine. Kathryn's spotless reputation is destroyed, and people finally see her for the troubled, callous mastermind that she is.
In the final shot, Annette drives away in Sebastian's Jaguar, putting his sunglasses on, with his journal by her side and fond memories of being with Sebastian playing through her head.