The film starts with Susie Salmon (Saoirse Ronan) reminiscing about her childhood. There was a snow globe with a penguin in it she was worried for since he was all alone. Her father, Jack (Mark Wahlberg) tells her that the penguin has a nice life, since he is stuck in a perfect world. Later that night, Jack makes love to his wife, Abigail (Rachel Weisz), next to the pile of books near their bed.
Susie remembers being given a camera and how she loved that photos could capture a moment before they were gone. She wanted to be a wildlife photographer and would go around taking photos of people in the neighborhood (focusing on a heavy-set girl).
She remembers going to a sinkhole near a farm with her father and tossing things in, remembering that she was full of wonder at how the earth swallowed things whole. She remembers seeing Ruth Conners (Carolyn Dando), the school weirdo, at the farm and that she (Susie) now knows that Ruth saw things that others didn't.
Susie also remembers the worst thing that ever happened to the family: The day her little brother, Buckley, swallowed a twig and stopped breathing. Susie stole her father's mustang and proceeded to drive past her parents in town on the way to the hospital, saving her brothers life. She remembers the relief in her parents eyes when they thought that they were lucky since nothing bad happened to them. Lynn, Susie's grandmother, tells Susie that the Buddhists say that saving the life of another grants a person a long life. Susie notes the irony of this since she was murdered on December 6th, 1973 - back before missing children were on milk cartons and people thought of such things happening.
Susie has a crush on a senior named Ray Singh. Lynn notes Susie's crush and tries to get her to talk to him. Susie tells her to shush while her narration tells us that if she hadn't been so distracted by Ray, she'd have noticed that something was wrong. That someone in her neighborhood was watching her. Lynn buys her a milkshake and asks why she hasnt kissed him. She says she's afraid she wouldn't be good. Lynn tells her that her first kiss was with a grown man.
The man watching Susie was George Harvey (Stanley Tucci), a neighbor who loved tending his garden. In his house he would build and decorate dollhouses and create little furniture sets. He became obsessed with Susie, making her a prime victim. He would spend his nights building all sorts of odds and ends in his house.
Across the street, Jack is building a ship in a bottle with Susie. He tells her they are creating something special and that she is one of the most important things in his life. He lets her pull the cords to erect the ship in the bottle and blows out the candle. In the dark we are shown Harvey in a field digging a hole.
Abigail is in Susie's room and tells her to clean up. Susie asks her to develop her film (24 rolls of it), and Abigail freaks out. Jack walks in and is shocked to see that Susie used all the film they had given her for her birthday. Jack suggests developing them a roll per month. Susie complains that she'll be middle aged. Jack and Abigail consider how much it would cost, and Jack suggests that they just pay the $75 to get the photos developed. Susie's sister, Lindsey, and Buckley argue a bit. Abigail gives Susie a hat she knitted for her, much to Susie's disdain. As Lindsey and Susie walk to school, Harvey watches them from his house.
At school, Susie and her best friend, Clarissa, talk about a movie they just saw when Clarissa's boyfriend drags her away. Ray comes over and asks her what she thought about Othello. She says she liked it (even though she didn't) and Ray says that they have more than one thing in common. He leans in almost to initiate a kiss but Susie gets flustered and opens her locker, spilling her stuff all over the floor. Ray picks up her math book and slips a note inside it. He asks her what she is doing on Saturday. In shock, instead of answering she blurts out asking, "Are you really from England?" He tells her that she is beautiful and as the two are about to kiss, Ruth is kicked out of her art club by the teacher complaining of her anatomically accurate and well-drawn piece since it got a boy excited.
Ruth tries to get her picture back but the professor keeps it for himself. Ray tells Susie to meet him at the gazebo in the mall and she agrees.
Susie leaves the school happy and takes a shortcut home across a field, same as Ruth. Jack, Abigail and the others are at home, while Susie walks across the field and drops her math book. Ray's note flies out and she races after it, where George Harvey tries to catch it, thinking it's her homework. He asks if she remembers him. He tries to make small talk, he tells her to tell her folks he says hi, and asks her to check out this thing he has built. He tells her that he just got excited for having built something the whole neighborhood will enjoy.
Susie gets curious and decides to check it out. She comments on how she can't see anything. He steps on the ground, which makes a sound. As she steps closer, we're shown glimpses of what her family is doing during dinner time. Harvey reveals a trap door which shows a well-lit club house. He asks Susie to try it out and she climbs inside. There are games and toys in the room along with numerous candles. Harvey makes sure no one is around and closes the door behind them as he goes down. She has a seat and Harvey laughs and tells her that the only rule is no adults allowed. He compliments her hat and starts to scare Susie. He tells her she has to be polite and makes her take a drink. He takes off the cap and gives her the drink as he takes off his coat. He tells her she's very pretty and sits across from her. He asks her if she has a boyfriend and she tells him she doesn't.
Susie's very scared and continuously tells Harvey she needs to leave. He tells her he doesn't want her to leave and that he won't hurt her. She tries to climb up the ladder but he drags her down. She escapes the room and runs across the field. Ruth, almost home, finds Ray Singh's note, just as Susie races by her away from Harvey.
Jack and Abigail are worried for Susie and call the police. Jack gets in his car and asks around the mall for Susie, only to be brushed aside. In the meantime, Susie is in a strange part of town. She sees her father and screams out to her father but Jack only hears an echo. A car passes and the vision of her father dissipates into a dark and desolate version of the corner her father is at. A detective, Len Fenerman (Michael Imperioli) asks Abigail for a description of Susie and asks the basic questions asked in Missing Persons Cases.
Susie runs into her home only to realize that the dark and twisted version of her house is not really her home. As she walks down the hall she sees a light under a door. She walks toward the door and cautiously opens the door and enters a white tiled room where a man is taking a bath. There is blood and dirt all over the floor of the white room. Susie looks at the man (whose face is covered) and looks around the room. She sees a bloody sink with a razor in it and sees her charm-bracelet on the sink. The man takes off the towel to reveal George Harvey, taking a bath after having murdered Susie. She screams when she realizes what happened.
Detective Fenerman looks around the field and finds Susie's hat along with the destroyed structure. He brings the hat and tells Jack and Abigail that they didn't find her body but that they found a large amount of blood in the hole. Jack and Abigail lie in bed crying over Susie and Jack promises he's going to make it right, while Abigail insists that he can't.
Harvey sets to work on his house and incinerates all the evidence of having encountered Susie. He hides his bloody shoes and prepares for the door to door search by the police. He makes it look like he was casually relaxing when Detective Fenerman steps in to ask him several questions. He lectures Fenerman about how he feels responsible since he didn't see her and knows that she would have screamed. He looks at photos of Susie and realizes that he left her unique charm-bracelet on his dollhouse, next to Fenermans partner. Harvey surreptitiously hides the bracelet while he shows Fenerman the dollhouses he has built.
Lindsey goes to talk to her father about Susie. She asks if Susie is dead, but doesn't get a response. Susie describes slipping away and says that she isn't afraid. She is in her personal heaven when she remembers that there was somewhere she was meant to be. In the middle of her mountain hillside she sees a gazebo, where Ray Singh's reflection looks out morosely, paralleling the loneliness he feels in the real world without Susie. He fades away in a haze of light, leaving Susie running across fields of gold as she tries to reach the gazebo. As she nears it, she begins to be bogged down in water, drowning and calling out to Ray.
In the real world, Harvey takes Susie's bracelet and breaks off the House charm and tosses the rest in the water. In her personal heaven, Susie floats to the bottom of an ocean and lands in an aquatic version of her house. She awakens in a gazebo in the middle of the woods. She sees Ray Singh's note and finally gets to read it. If I have an hour of love upon this earth, I would give my love to thee. The Moor (Othello). She closes her eyes in sadness as she sees Ruth (back on earth) enter the gazebo and give the note he gave Susie back to him. She consoles Ray on his loss and admits that she never truly understood what dead meant. Ray tells her that it means that Susie is gone. She wonders if Susie is really gone, since she remembers how vividly she saw Susie before she faded away in front of her.
Back in the forest, a young woman, Holly, tells Susie that she shouldn't have looked back since Ruth will carry that moment with her forever. Susie is curious and asks Holly about where they are. Holly tells Susie that they are not in Heaven yet. They are in limbo which is a bit of Earth and a bit of Heaven. Susie asks where Holly and she are going. Susie admits that she wasn't moving towards Heaven yet. Holly tells Susie that it's time to let go and that Susie can't go back. Susie turns around and runs to the ocean, which is suddenly full of ships in bottles, breaking.
Jack, so upset over the loss of Susie stays in his house and looks at his ship bottles. He starts smashing them in anger but stops before he breaks the one Susie helped make. He clutches it to his heart and cries. Abigail puts her hands over Buckley's ears as his father loses himself. Harvey felt safe since he thought that everyone was moving on. Susie mentions that the one thing Harvey didn't understand was how much a father could love his child. As Susie looks in on Jack and his one burning candle, her presence is apparent in the reflection of the candle flame, different on one side to the other.
In Limbo, Susie and Holly run around. On Earth, Jack looks at the snow globe his daughter loved so much. As Holly and Susie continue to have fun, events on Earth continue to unfold. Buckley goes to his father and tells Jack that he saw Susie and she kissed him on the check. Jack hugs his son and holds him close as Buckley tells him "I think she listens". Jack develops the photos one roll per month. Abigail asks why they are dragging it out, but Jack says they made a deal. Abigail tells him there is no deal.
Jack continuously calls Len with new leads since he believes that the person who killed Susie was someone she knew. Len comes over and Jack tries to present his argument and Abigail freaks out since he has become obsessed in the eleven months since Susie's death. Len tells Jack that instead of looking for the killer, he should console Abigail instead since she needs someone to rely on. He calls Lynn and she comes to visit. Jack tells her that he's worried about Abigail. Lynn is cavalier and asks Jack if he's drinking. She tries to help but winds up smoking, drinking and making a mess of things while playing with Buckley.
Abigail goes about trying to clean, but avoids Susie's room. Lindsey goes for a run with the family dog and passes George Harvey's house. The dog barks at Harvey until he goes inside and Lindsey gets scared near him. She runs away as soon as Harvey goes inside. As Buckley paints Lynn's toes, he says he knows where Susie is. She says she's dead and Buckley tells her Susie is in the in between and that Lynn will probably die soon.
While Susie dreams she remembers her heart pounding and hearing the voices of the dead. She remembers coming to the same door and always being afraid. She says that she knew that if she ever went in the door she would never return. She knew that Harvey was feeding off of the memory of what he did to Susie over and over but that he would feel the emptiness rise again. When he saw young lovers in the fields having sex, he would silently watch, enveloped in emptiness.
Abigail asks Jack if he is coming to bed. Jack is staring at a photo album. The next day she goes to visit Len at the police station. She gives him one of Buckley's drawings of him. Lindsey, in bed, hears Lynn and Abigail fighting. Lynn screams that Abigail is not living with the death and that there is a tomb in the middle of the house. Jack wakes up one morning with a letter on his desk and Abigail leaving. Her letter tells Jack that she is leaving for an orchard. She goes as far away as possible. She writes to Lindsey. Susie and Holly watch Lindsey fall in love with a young man. Susie watches with a little jealousy as she watches Lindsey have the moment she would never have. Susie is happy for her, but terribly sad. Holly asks why she's upset but Susie doesn't tell her that she's crying for herself.
Ray spends his time with Ruth. Ray would think of Susie but struggle with the idea of letting her go. Harvey, intent on claiming Lindsey, collects articles of her. He knows that Lindsey suspects that Harvey had something to do with Susie's death and disappearance. Harvey feels the familiar itch that comes with his desire to kill and began constructing his next kill room.
Jack develops the last roll of photos, two years after Susie is gone. As he looks through them he flashes to the taken photos while suspiciously walking through the mall. He sees a picture of George Harvey and suddenly wonders if he is the killer. In Limbo, Susie looks through her developed photos, which are twisted versions of the world she is in, while Jack struggles on Earth to accept that the killer may have been around him the whole time. He drives by Harvey's house and sees the dead rose bush. Harvey sees Jack looking in and hides while carrying a large amount of wood sticks. Jack turns around and heads to the car. Harvey sees a shadow of Susie on a bike and drops his wood sticks. Jack hears them drop and turns around. He approaches Harvey and asks what Harvey is building. They make small talk about duck hunting. Harvey tells him that he has always been an outdoorsman. Jack sees a rose bush and starts feeling one of the roses, while in Limbo, Susie opens a mysterious box which appeared. In Limbo, she holds a rose, in conjunction with Jack. Jack imagines it blooming in his hand and it fades away as he helps Harvey construct his duck trap, unaware that is actually the next kill room for Harvey's attempt on Lindsey's life.
As Jack helps Harvey he realizes with certainty that Harvey is the one who killed Susie. Harvey tells him that it is time to leave. Harvey tells him he can't help Jack. Jack screams at him and pounds a hole in Harvey's door as he goes inside.
That night Len tells Jack that he can't keep going after people. Lindsey explodes and tells Len that he's a fool since they stopped looking for Susie or her killer a long time ago. Jack finally says that its time to move on. He thanks Len for being a good friend and puts the kids to sleep. Jack takes Buckley's baseball bat and heads to confront Harvey. He follows him into the corn fields and loses him but continues looking. Holly tells Susie that she doesn't need to be ruled by her hatred for Harvey any'more. Susie tries to will her father into letting go, but he continues. He stumbles upon a couple and the boyfriend beats him half to death as Harvey watches.
In Limbo, Susie looks through Harvey's past and sees that he is a serial killer. Among his victims is a girl named Holly.
On Earth, as Jack recovers, Lindsey does her own investigation. She breaks into Harvey's house and finds the cabinet full of clippings focusing on her fathers assault and Susie's disappearance. She checks every room as Harvey drives back to his house, having packed up his weapons and gone out to scout a new location. Lindsey finds a hollow space and finds the journal in which Harvey draws his kill rooms and pictures of dead animals. She finds her notes on Susie and sees the careful research he put into finding Susie. She sees the design for the kill room. Harvey enters the house and hears he pages of the book turn. Lindsey finds a lock of her sisters hair in the book. Harvey goes down stairs and sees that the window to the house is broken. He turns around carefully and hears the creek of the floorboard going back into place. Lindsey grabs the book and falls off the roof with the book. She gets up and runs just in time as Harvey bursts out in pursuit. He grabs a few valuables and prepares to run away.
Lindsey runs home looking for Jack, but finds that Abigail has returned. Abigail and Jack see each other. Lindsey sees her parents making up and looks at the book. Lynn asks why Lindsey is so shell shocked and Lindsey presents her with Harvey's book. The police go to Harvey's and prepare to arrest him, but Harvey has taken Susie's body (which he kept in a safe) and brought it to the landfill. Ruth and Ray watch as Harvey and a foreman drop the safe into the landfill.
In Limbo, Susie meets another victim, Flora, who is by the tree Holly and Susie were walking towards. All of the victims gather under the tree. A small girl hugs Susie and holds her hand to comfort her. Holly joins her and the two hug. Susie tells her that its beautiful as they walk away from the tree in groups. But Susie stops. Holly asks what Susie is waiting for and Susie responds that she is almost free.
As Harvey tries to dump the safe, he notices Ruth watching. Ruth calls out to Ray as she sees Susie in the reflection of the window walking toward her. Susie borrows Ruth's body and Ray realizes that it is Susie in Ruth's body. He sees Susie in Ruth's place. She asks Ray to kiss her and Ray leans in and kisses her. Harvey pushes the safe into the sink hole and it rolls in and sinks into the dark. Ray and Susie come apart and Ray tells her that she is beautiful.
She says that "The Lovely Bones" are the connections that happened after Susie was gone, in a way that held her family and friends world together, even while she isn't in it.
The epilogue shows Abigail and Jack back together, Lindsey pregnant with her first child, Ruth and Ray together in bed. Harvey moves to another town and sets up to continue his murder spree. One evening, Harvey tries to lure a young woman into his car by offering her a ride, and steps too close to the edge of a cliff. As she rebuffs him, an icicle breaks and hits his shoulder. As he tries to fish it out of his back, he falls off the cliff and breaks his neck. He dies, covered in snow.
Abigail goes into Susie's room and Susie narrates that she had been waiting for Abigail to enter the room and come to terms with Susie's death. Susie sees her and accepts that it is time to move on and enter Heaven. She ends her narration with: "I was here for a moment and then I was gone. I wish you all a long and happy life."