The film begins with British writer Virginia Woolf (Nicole Kidman) putting stones inside her pockets before drowning herself (in real life, she walked in to the River Ouse on 28th March 1941).
Laura Brown (Julianne Moore) lives in 1951 in a wealthy Los Angeles suburb. Her husband, Dan Brown (John C. Reilly) is having a birthday. While he's at work, she makes a chocolate cake for him. Their son, Richie (Jack Rovello), asks if he can help her with it. As he sifts the flour, he wants to know why they are making the cake. "So Daddy will know we love him?" he asks. She answers yes and then he asks, "He won't know it, if we don't?" She answers him, "no". She is heavily pregnant with their second child. She is also reading a hardback copy of Mrs Dalloway, which is considered Virginia Woolf's best novel.
Clarissa Vaughan (Meryl Streep) lives in modern 2001 New York and is planning a party for her prize-winning poet and close friend, Richard Brown (Ed Harris). Rich has been suffering AIDS for many years. He's a celebrated poet, and Clarissa is his editor. Clarissa worries about Richard a lot, and takes care of him as if she were his mother. Back at home, when she is preparing the party almost on her own, she has trouble with her girlfriend Sally Lester (Allison Janney), who has been unfaithful to her for some time. Several people appear for the party: Clarissa's daughter Julia (Claire Danes) and the most cherished of Richard's ex-boyfriends, Louis (Jeff Daniels), who has another relationship with a younger man but who is still a bit sad and melancholic.
Back to the UK, where Virginia has just started to write a novel. She and her husband Leonard Woolf (Stephen Dillane) have moved to a village outside London, because London's hectic and frenzy life has affected Virginia's psychological health. She had tried to commit suicide twice, and used to hear voices. Leonard is busy with his printing press business, but he watches over her tenderly. One sunny day they are visited by Vanessa (Miranda Richardson), Viriginia's sister, and her two sons Quentin and Julian (George Loftus and Charley Ramm) and daughter Angelica (Sophie Wyburd). They are talkative and full of life, but their visit causes some anxiety to Virginia. To have lunch and tea prepared as she wants, having to force the cook and main maid Nelly Boxall (Linda Bassett) to travel to London to buy some things and then travel back is an ordeal to the lady of the house. Virginia has problems to make herself obeyed by their servants, especially by pushy Nelly. In real life, many pages on Woolf's diary were about Nelly, a person she used to fear so much that she wouldn't even dare to give the sack. This time Virginia had to be obeyed.
Angelica finds a dead bird recently deceased at the Woolfs' garden. They bury it with much pomp, and this puts a bigger strain on Virginia's damaged emotions. At the end of the day, the four visitors go back to London merrily and Virginia and Leonard stay at home.
Back in LA, Laura's friend, Kitty (Toni Collette) stops by. Laura complains about the cake not turning out right for her husband's birthday. Kitty says she doesn't understand why and that baking is easy to do. Kitty then says that it's ok, that everyone has different things that they're good at. Kitty is dressed perfectly and seems to have the perfect life. Laura learns that Kitty is about to have surgery performed, as she is seriously ill, and that's why she couldn't have any children. Kitty starts to let her guard down and seems to get emotional over her problem. Laura and Kitty kiss each other. However, Kitty behaves and talks as though nothing had happened. After Kitty leaves, Laura throws the first cake away and then makes a perfect one. Meanwhile, Richie is sitting quietly while he watches his mother. She stops, looks at him and asks, "What?" while he looks on. She then takes him to a neighbor's (Margo Martindale) while she goes out, which Richie highly protests to. She proceeds to drive around. She sees the sign for a hotel and decides to book in. There, she takes out all the medicines that she took from the cabinet in the bathroom from her home and puts them on the bedside table next to her. She puts herself on top of the perfectly-made bed and reads Mrs Dalloway but falls asleep whilst reading her book. For her, death is like a flood, a river overgrown which will drown her from under the hotel bed. Suddenly she wakes up. She has just decided that she will wait for her second child to be born and then she will leave her family. When she comes back home as though nothing special had happened, Richie knows that she's lying. That night, Laura's husband dines with his family and eats the cake. He is a contented quiet men and says that the cake is delicious, and appreciates the fact that Laura has done it. He talks of how perfect his birthday was thanks to his family.
In New York, Richard Brown (Laura's older son, now a grown-up man) wants to skip the party. He tells Clarissa that she has been the only reason he had to live, but that now, she has to let him go. Clarissa is a lesbian, but she wonders if she is still in love with Richard. However Clarissa cannot prevent Richard from jumping from the window. Instead of a party, she has to prepare Richard's funeral. Richard's mother, Laura Brown appears. She has become -according to Julia- a sweet old lady, not the monster as late Richard Brown used to describe her. Laura tells how she moved to Canada to lead an independent life as a librarian in Canada, but she won't apologize for the hurt she has caused to her family because her pain doesn't make any difference now to her late husband (who died of cancer) and children (her younger daughter had also died).
In the UK, Virginia has changed her mind: her character Mrs Dalloway won't die, another character in her novel, a rambling poet married to his lonely Italian nurse, will do so. When Leonard asks her why somebody must die in her novels, she tells him "so that we all appreciate life." Anyway, Virginia tries to run away to London, but Leonard catches her while she is waiting at the train station. Virginia talks to him, and Leonard can't put up with her anymore: he promises they will be back to London soon. As the audience knows, Virginia will end up committing suicide there.
And that's how the film ends: as it has begun, with Virginia Woolf committing suicide. In real life, she wrote some other novels after Mrs Dalloway and before committing suicide.