The film starts with a shot of the flashing green light in East Egg, Long Island, as Nick Carraway (Tobey Maguire) says how his father told him to always see the good in others. He is seen in the Perkins Sanitarium talking to a doctor, whose records indicate that Nick is there due to his alcoholism, among other things. Nick adds that there was only one person who he saw good in: Gatsby.
Nick takes us back to the previous spring in 1922, where Wall Street was booming, and bootleggers were in business due to the alcohol ban. Nick moves to a cottage on Long Island in West Egg, saying he was full of ambition as he started working as a bond broker for Wall Street after originally wanting to be a writer. This cottage was next door to Gatsby's mansion.
Nick goes across the bay to visit his cousin Daisy (Carey Mulligan) and her blue blooded husband Tom Buchanan (Joel Edgerton), who went to Yale with Nick. Daisy introduces Nick to Jordan Baker (Elizabeth Debicki), a golfer. Over dinner, we learn that Tom is pretty arrogant and racist, remarking on the rise of the colored empire. He gets a phone call, and Jordan tells Nick that Tom is having an affair. Later, Nick walks with Daisy, who says she has become cynical lately. Nick asks about her daughter, and Daisy mentions she is glad she had a girl and hopes she can be a fool, because, in her words, that's the best thing a girl in this world can be. Nick returns home and notices a figure standing on the pier and looking and reaching toward the green light, and Nick believes this is Gatsby.
The doctor at the sanitarium convinces Nick to write a novel about his experience. He continues the story by writing about the Valley of Ashes, a desolate part of New York featuring a billboard with two eyes watching over everybody, said to be the eyes of T.J. Eckleburg. Nick and Tom are headed to the Yale Club when they get off the commuter train and head to a car repair garage run by George Wilson (Jason Clarke). Tom chats with him over business matters, and George's wife Myrtle (Isla Fisher) comes downstairs. It becomes obvious that she is Tom's mistress. She mentions her sister is coming to New York and wants to introduce her to Nick.
Later, at an apartment, while Tom and Myrtle are going at it in the bedroom, her sister Catherine (Adelaide Clemens) comes in with two other friends. They begin to have a party, and Nick remarks that this is only the second time he's ever been drunk. At night, he watches from the window and looks upon the people in the town, saying he finds himself within and without the world he is in. Myrtle comes out of the bedroom shouting Daisy's name, enraging Tom and causing him to smack her hard across the face.
Nick wakes up in his home and says he has no memory of how he got back. He opens front door to find that he has received an invitation to a party at Gatsby's, saying he was the only one who has ever gotten a direct invitation, as all the other wealthy people in New York just come to his mansion and indulge themselves. He goes to the party, which is extravagant, and asks around for Gatsby, but nobody has seen him. He runs into Jordan, who is also curious to find him. They hear rumors such as Gatsby being a German spy or an assassin. Eventually, Nick happens to encounter the man himself, Jay Gatsby (Leonardo DiCaprio). Nick tells Jordan that he imagined Gatsby to be older and fatter. A man comes by and tells Jordan that Gatsby wishes to speak with her in private. A while later, as the party comes to an end, she comes out telling Nick that she just heard something very shocking. Before she can say anything else, she is pulled away by a snobby rich man.
The next morning, Gatsby shows up at Nick's cottage in his Duesenberg and takes Nick on a trip, describing to him "God's truth" about himself. He claims to have come from a wealthy family that are now all dead, and later attending Oxford and going on to become a decorated WWI veteran. He takes Nick into the city to meet with his business partner Meyer Wolfsheim (Amitabh Bachchan). They go into a bar beneath a barbershop where bootlegged alcohol is being sold. We learn that Wolfsheim is rumored to have rigged the 1919 World Series, and Gatsby considers setting Nick up for a business with them. Tom Buchanan shows up, at which point Gatsby vanishes.
Nick has lunch with Jordan, who tells him what her conversation with Gatsby was about. Through a flashback, we learn from Jordan that five years earlier, Gatsby and Daisy were romantically involved while living in Louisville, Kentucky when Gatsby was a war officer. When he is called away, she waited for him, but then eventually met Tom and was set to marry him. Before their wedding, however, she got a letter from Gatsby, causing Daisy to nearly get cold feet, but she went on to marry Tom. Gatsby also intentionally bought his mansion across from Daisy's home, hoping to see her. Jordan tells Nick that he wants him to invite Daisy over for tea. He approaches Gatsby that night and says he will do it.
The following morning, a bunch of people fix up Nick's lawn and home, and it's clear that Gatsby intended to have tea at Nick's place instead of his. They fix it up and make it look nice, but Gatsby starts getting nervous. He almost leaves until Daisy comes in. Nick brings her inside, but Gatsby has fled. She is amazed at all the flowers in the living room, and then Nick hears a knock at the door. It is Gatsby, dripping wet from the pouring rain outside. He enters, and Daisy sees him, and they both comment on how glad they are to see each other again. The tea time is awkward, until Nick decides to leave them alone by saying he is going into the city. When he gets back to his house, Gatsby decides to take them to his place, and they spend some time at the beach before coming back to his home. He shows Daisy a variety of shirts he possesses, and while she is excited, she starts crying. Nick knows it's sudden for her after five years, but she won't admit that.
Nick tells some truth about Gatsby. His real name is James Gatz, and that he came from a poor family of farmers from North Dakota. He did not see himself as part of that family and as he got older, he set off to accomplish more. While riding his boat, he encountered a yacht sailed by a man named Dan Cody (Steve Bisley). The young James Gatz rescued him from a storm and went on to sail with him, adopting some of Cody's customs like using the term "old sport" (which he frequently calls Nick). After Cody died, he did not receive his inheritance because of Cody's family, so Gatsby went on to make himself a wealthy man.
Gatsby throws another party, this time having Daisy and Tom show up. She and Gatsby retreat to a nearby location where they begin to kiss passionately. Daisy says she wishes they could run away together. Gatsby is pulled away by his butler to settle a business dispute. After the party is over, Gatsby believes Daisy did not have a good time. He tells Nick that he needs her to tell Tom she doesn't love him so they can go back to Louisville and get married. Nick tells him he can't repeat the past, but Gatsby insists he can. He notes the first time he kissed Daisy when they first met, and Gatsby felt he had already married her. Before leaving, he tells Nick he is wrong about the past.
Gatsby stops throwing parties for a while. One day, which happens to be the hottest day of the summer, he invites Nick, Daisy, Tom, and Jordan over for lunch. Gatsby tries to hold Daisy's hand, but she panics and claims she is bored and wants to go into the city. Tom notices that she is feeling something for Gatsby, so he agrees to go into the city. Gatsby and Daisy drive off in his car while Tom takes Nick and Jordan. They stop for gas at George Wilson's garage, and he has learned of Myrtle's infidelity, but not that she's sleeping with Tom.
The group meets up at a hotel where a man is cutting up a large block of ice to pass around because of the heat and for drinks. Tom starts to slowly antagonize Gatsby, hoping for a confrontation. He mocks his use of "old sport", claiming he lied about Oxford, and accuses him of bootlegging with Wolfsheim. Gatsby hits back by saying Daisy loves him and not Tom, putting her in an uncomfortable position. As Tom continues to egg him on, Gatsby snaps, throws the alcohol and grabs Tom, screaming at him and nearly hitting him. This frightens Daisy and Jordan. She and Gatsby leave. Tom decides to open a bottle of liquor and offers Nick some. He remarks that he just remembered that day was his birthday.
At night, Myrtle is being abused by George as he asks her where she got her pearls. She runs out into the street as she sees the Duesenberg coming, thinking it's Tom. The car speeds as Gatsby grabs the wheel, trying to swerve, but the car strikes Myrtle and kills her instantly. Tom, Nick, and Jordan drive by the scene and discover Myrtle's corpse as the police are on the scene. Tom is visibly distraught but denies having known her well. He goes to George, who is grieving. Tom tells him that the car that hit Myrtle was driven by Gatsby.
The Buchanans go back to their place. Jordan invites Nick inside, but he refuses. As he leaves, he hears Gatsby calling to him. He tells Nick that Daisy was driving after leaving the city to ease her tension, but although he tried to move the car, they were unable to stop from hitting Myrtle. Nick walks away, seeing Tom and Daisy talking, apparently having reconciled.
Nick meets up with Gatsby later as he is fixing up the Duesenberg and covering it. He learns more about Gatsby - the whole truth. Gatsby was always after Daisy and hoped she would wait for him after he came back from the war. Although he was penniless, he wanted to come back to her, but she had already married Tom. Nick realizes Gatsby truly loved Daisy, and he only threw the parties in the hopes that she would show up for one of them. That morning, Gatsby's gardener comes in and says he is to drain the pool before the leaves fall. Gatsby decides to take a swim before that and asks Nick to join him but he declines. Before finally leaving, Nick tells Gatsby that the Buchanans are rotten people and that Gatsby is worth more than them. They share a friendly wave before departing.
At work, Nick is too distracted and hopes Gatsby will call him with good news. At the same time, we see Daisy looking at her phone as she considers calling Gatsby. The phone rings at his place, and Gatsby hears it, excited. 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 also see that it was Nick, not Daisy, who was calling, and he panics as he heard the gunshots.
After Gatsby's death, the media blamed him for the affair with Myrtle, as well as her death. Nick is upset that he could not tell them the truth. His place is bombarded with reporters who ungraciously huddle over his open casket. Nick tries to get in touch with Daisy, but she and Tom are leaving with their daughter, packing up everything and having their butler tell Nick they are gone. Nick adds that virtually nobody attended Gatsby's funeral except him. He would later go on to leave New York and go back to the Midwest, completely disillusioned. He also muses that Gatsby could not see that his dream of being with Daisy was behind him.
Nick completes his novel, simply titling it "Gatsby". He takes another look at the cover page and writes something extra, now calling it "The Great Gatsby".