It is graduation day, 1988, for a Seattle high school. Lloyd Dobler tells his girl friends Corey and DC that he is going to ask out class valedictorian Diane Court. They tell him he is crazy, because she is a "brain" and he is not.
As Diane is getting driven to graduation by her father, she is practicing her speech. Her father, James, is extremely supportive, telling her that it is funny and everyone is bound to love it.
At graduation, Diane's speech is a bit of a bomb. Nobody laughs and the only people in the audience who appear to be interested in it are Lloyd and Diane's father. In the speech, she talks about how she is fearful of the future. Lloyd keeps telling his friends about how much he loves Diane's eyes.
After graduation, we see Diane receive a new car from her father as a graduation present. Meanwhile, Lloyd gets his friends to take a photograph of him as he walks behind Diane.
Later that day, Lloyd gets the courage to call Diane. He invites her to a graduation party, and much to his surprise she agrees, even though it is unclear if she even remembers who he is. After the phone call, she is shown looking into her yearbook, and expressing surprise when she sees Lloyd's picture.
Shortly afterwards, Diane's father gets a letter explaining that Diane has won a fellowship that will allow her to go to university in England. She will therefore be leaving in 16 weeks. Apparently this fellowship is only given to one student in America, so this is a huge honor.
Lloyd picks her up for the party wearing a khaki trench coat. She is wearing a white skirt and matching blazer with a purple flower in her hair. Lloyd meets Diane's father and is very gentlemanly and polite.
Upon arrival at the party, people are intrigued by the fact that Lloyd has shown up with Diane Court. It appears as if this is the first time that Diane has ever socialized with anyone, and they seem pleased that she showed up. It seems that while her classmates admired her, very few know her level at all. Lloyd is given the task of "keymaster", which means he has to spend the entire party holding a bag of car keys; he can only give them back to the drivers if they are sober.
Diane and Lloyd do not spend the party next to each other, but at various points, Lloyd does check up on Diane, which she seems somewhat pleased by. When the party ends, there is one kid who is too drunk to drive. Diane and Lloyd drive him home, but it takes them three hours to find the guy's house. Lloyd doesn't end up delivering Diane home until dawn. The two do not kiss on this first "date", and her father is not upset by the late return, because she had called him while at the party to let him know where she was.
It is clear by this point, that Diane likes Lloyd more than anyone might have expected. They arrange a second date: a dinner party with Diane's father and some of his colleagues from a senior citizen home, which he manages.
Lloyd's friend Corey tells him to keep his mouth shut during dinner, which he mostly seems to do. At one point, Diane and her father tell a story about when Diane tried to board a plane once, but got so scared that her father had to tell the pilot to turn the plane around before it took off. Lloyd remarks that he is amazed by the closeness of Diane and her father: that he has nothing like that in his life. When asked what his dreams are for the future, however, he disappoints the adults by not having any ambitious dreams. He tells them that he just wants to spend as much time as possible with Diane and is interested in kickboxing.
Midway through the dinner, two men come to the door to inform Mr. Court that he is under investigation from the IRS. He gets agitated and tells them to visit him at his office.
The film progresses with scenes showing us that Lloyd and Diane are gradually getting more and more friendly with each other. At the same time, it is clear that there is a considerable stress surrounding the IRS investigation.
Diane tells Lloyd that she is just too stressed out to get into anything deep with Lloyd. They agree to be "friends with potential."
This status changes while Lloyd is teaching Diane how to drive stick shift. She is barely catching on, but enjoying the process. At one point, the two get quite close and Lloyd plants a kiss on her, which she accepts. They kiss a few more times and then decide to drive to somewhere more private.
Eventually, we see Diane and Lloyd parked in Lloyd's car by the sea. The two appear to have had sex underneath some blankets in the back seat. Diane remarks how Lloyd is shaking. She thinks it is because he is cold, but he explains it is because he is so happy. On the radio is Peter Gabriel's "In Your Eyes". She tells him to listen to the song, because it is so nice.
In the morning, Diane arrives home to a dad who is quite upset with her. Unlike the previous all-nighter, she failed to call him this time around. At this point she mentions how she feels free to "say anything" to her dad, and so tells her dad everything about her and Lloyd's relationship. She explains that she first wanted to avoid doing anything serious like sex with him, but in the end, she decided to go for it. While her father isn't upset at her, he clearly isn't thrilled to be hearing this from his daughter.
This added strain between Diane and her father seems too much for her to handle. Her father suggests that she break up with Lloyd, to help make her life simpler. He suggests that she could give him something for him to remember her by, such as a pen, which he gives her.
Next time we see Diane and Lloyd driving around, she breaks up with him. She is clearly upset about doing this, but goes through with it, and does give him the pen before exiting his car.
Lloyd is quite upset. He leaves seven messages on her machine and in what is the iconic scene, stands outside her bedroom window playing Peter Gabriel's "In Your Eyes" from a boom box which he holds above his head. Diane hears this, but only lies in her bed.
Lloyd calls her one more time. We watch as Diane and her father listen to Lloyd's message. From Diane's reaction, it is clear that she is still very much attracted to Lloyd. Her father tells her to just pick up the phone, but she replies that if she did, she would just get back together with Lloyd. Eventually, she can't resist and picks up the phone, but just as Lloyd hangs up.
By now the IRS investigation is heating up. Diane goes to the investigator's offices and demands that someone tell her what is going on. The man tells her that they believe that Mr. Court has been stealing money from the residents at the senior home when they die. He then hides the money in the form of cash and collectibles in the house. Diane is shocked and does not believe it.
She goes home and starts searching the house for the supposed cash. Meanwhile, we the audience are able to see that the house is filled with the kinds of collectibles that the investigator tells her about. Prominently displayed is a Wurlitzer jukebox, which we previously learned cost Mr. Court $9,000. There is a Persian rug, and Diane stops to notice the fancy ring that her dad gave her as a graduation present. Eventually she opens up an antique box that her dad kept in his office, and discovers a stash of thousands of dollars.
She confronts her dad, who tries to deny it. She is angry that, while she always told her father "anything" he is unwilling to come clean. He breaks down and admits that he was taking their money. He tries to justify it by saying that it was all done for the sake of Diane.
While Lloyd is engaged in a kickboxing training match at the gym, Diane comes by to ask for forgiveness. She tells him that she loves him.
Meanwhile, we see two lawyers negotiate a deal. Mr. Court will be fined and serve a year of prison time, starting immediately.
We next see Lloyd meeting Mr. Court in prison. Diane is in the car, while Lloyd hands over a letter. It appears as if Diane is about to go to England. Surprisingly, we also learn that Lloyd is going to go to England with her.
Eventually, Diane comes out of the car and does finally hug her father goodbye. Before leaving, she tells him to write her, and leaves the pen she had previously given Lloyd in her father's hands.
The film ends with Diane and Lloyd on a plane together. A previous scene in the film indicated that Diane has never flown, and is very fearful of the experience. Lloyd tries to calm her down by telling her that most accidents happen in the first minutes of a flight. As soon as the "fasten seatbelt" sign goes off and a "ding" sounds, though, he tells her that everything is OK. The two are shown holding hands anxiously awaiting the ding. At the point that we hear the ding, the screen goes black, and the credits roll.