The scene opens with Peter Bretter (Jason Segel) in his house. The house is kind of a wreck and hes eating a huge bowl of cereal. Hes watching Access Hollywood and they are recapping his five year relationship with Sarah Marshall (Kristen Bell) an actress who plays in a CSI type TV show. He writes the music for the show and they look really happy together. Following that is a music video starring Aldous Snow (Russell Brand). He's a British hippy-free-love type singer and is apparently considered very cool.
The phone rings and it's Sarah calling to say she's on her way home. He quickly jumps up and starts to clean. He throws a bunch of stuff in the closet and then hops in the shower. He comes out of the shower in nothing but a towel. Sarah is standing there and says something along the lines of we need to talk. Peter drops his towel and the audience is given a full view of Jason Segel's front side. Actually, pretty much this whole scene is Jason Segel walking around naked. Peter is upset and asks if there is someone else. Sarah says no. Peter says they should just hold each other like they used to and she would love him again. They hug even though he's naked and it's incredibly awkward. Sarah finally admits that there is someone else and walks away.
Peter meets his step brother Brian (Bill Hader) at the bar. Brian thinks Peter needs to get over it. Peter thinks he just needs to sleep with someone since Sarah is already sleeping with someone so Brian agrees to help him meet some women. Peter ends up going home with one of the women. He starts crying afterwards when he has flashbacks of all he good times he had with Sarah.
Peter then goes to the doctor because hes paranoid that he may have an STD. The doctor is actually a pediatrician and tells Peter he should sleep with as many women as possible to get over his ex girlfriend. There is then a montage of Peter sleeping with various women.
Peter is still distraught and can't work. His brother Brian comes over to his house and it's a complete dump. Peter is trying to burn all the pictures he has of Sarah because she's everywhere and he can't get over her. Brian tells Peter that Sarah was always kind of a bitch to him and his wife. Peter gets mad and says that Sarah is better than Brian's wife. Brian gets really mad and says that his wife is carrying his unborn child and that Peter is not even blood since they're step siblings. Brian says that Peter should get away somewhere. Peter says that Sarah used to talk about this place in Hawaii that was really beautiful. Brian doesn't think that's a good idea but Peter says he's going.
Peter gets to Hawaii and goes to the hotel. There is a newly married couple in front of him Darald and Wyoma (Jack McBrayer and Maria Thayer). The couple leave and Peter is greeted at the front desk by Rachel Jansen (Mila Kunis). He says he doesn't have reservations but he thought he'd try his luck. She says that the only room available is the nicest suite in the house which costs $6,000 a night. He says he can't afford it, but just then he notices Sarah walking towards him. Rachel says that Sarah and her new boyfriend are staying there and that everyone is really excited. Peter tells Rachel that he and Sarah just broke up three weeks ago and he came here to get over her. Sarah walks up followed by her new boyfriend Aldous Snow and wants to know if Peter is following her and if he's staying there. He says that of course he isn't following her. Hes about to say that he's not staying there but then Rachel says that he's been booked for four nights into the expensive quite. Sarah looks put out and walks off. Peter tells Rachel thank you for saving his face but that he still can't afford it. She says he can stay there for free as long as he cleans up after himself since no one uses that suite but Oprah.
Peter calls Brian and Brian tells him to stop following Sarah and go to another hotel. Peter doesn't want to because it will look like he's running way. The audience sees that he continues to follow Sarah and Aldous to their room which is at ground level. Sarah and Aldous start to make out but Peter clears his throat to get their attention and then walks on up to his room. He tells Brian that he's sure that he ruined Sarah's day. The next scene is Sarah and Aldous having sex in many different positions. Clearly Sarah's day has not been ruined.
Peter on the other hand is upstairs watching her TV show and crying like a baby. Rachel from the front desk calls and says that there are reports of a woman crying loudly. Peter denies that it's him but the next scene is him curled in the fetal position on the floor crying loudly.
Peter goes to dinner at the restaurant and the host Matthew (Jonah Hill) makes him feel uncomfortable because he's there by himself. Then he seats Peter at the table across from Sarah and Aldous. Aldous invites Peter to join them. Peter says no but offers to buy them drinks. Aldous says that he is seven years sober and clean (he used to be an intravenous drug user) and shows seven bar tattoos on his neck that prove it. At the table behind Peter, a couple gets engaged. Peter leaves the table. Sarah comes after him and asks again if he followed her to Hawaii. He again denies it and thanks her for dating Aldous after him since Aldous probably shared needles. She asks how long he is staying. She is clearly unhappy. He tells her he's happy there and that he'll probably stay for a while.
Peter gets drunk at the bar and is joined by Darald. We learn through flashbacks that he and his new wife are having difficulties in bed. The next morning Peter goes to breakfast and orders pineapple juice with Rum which the waiter brings him. He decides he's going to try surfing and goes to find Chuck (Paul Rudd). Chuck agrees to teach him how to surf and also offers him weed which Peter says no to. Chuck tells Peter that when life gives you lemons, you just have to throw the lemons out. Peter does not learn how to surf. Peter goes back to his room and talks to Brian through a webcam. Brian tells him he just needs to meet more people. Chuck thinks the people are weird but thinks he might ask Rachel out. Brian thinks it's a bad idea but his wife thinks it's a good idea.
Its the fourth of July picnic and Peter sees Rachel greeting customers. He's about to ask her out but loses his nerve. He goes to sit down and Matthew tries to take his plate because he's seated by himself. There is a band playing but Matthew gets up on stage and asks Aldous to come up and play a song for everyone. Aldous agrees and comes up and sings a very sexual song for Sarah. Peter walks off towards the beach and talks to a guy who was serving food at the buffet that morning. (we'll call him Buffet Guy or BG for short) BG tells Peter he needs to stop telling people that he and Sarah broke up. He offers to let Peter help him prepare the pig for the luau that evening. Peter thinks he's talking about cooking the pig but Peter ends up having to help wrangle and then stab the pig. At the luau Peter finally asks Rachel out. She just wants to hang out as friends at beach party that evening.
At the beach, Rachel tells Peter that she was with this guy for two years and quit school and moved out here for him. Two weeks later she discovered him cheating on her. But she's happy where she is and doesn't want to go back to school. Peter admits that he hates writing for the TV show and really wants to finish his rock opera about Dracula made for puppets. Just then, Rachel's ex shows up and she tells Peter when she tells him to run, he should run. She gets up and wants to fight her boyfriend. BG steps in and ends up clocking the boyfriend while Peter drags Rachel off. Peter and Rachel go to a bar where a band is playing. Rachel says that she wants to go to the bathroom or get a drink (or something) and Peter offers to hold her purse. She says she's not that kind of girl. He has a flashback of all the times Sarah made him hold her purse and stand in the background while she took pictures.
Peter goes to the bathroom and there is a bunch of pictures of girls flashing including one of Rachel. Peter tells Rachel about it and she says she knows but that her boyfriend made her do it and now the owner of the bar won't give it back. He offers to take it but she says the owner would kill him. Just then, the band announces they're taking a break but that Peter is going to come up and play a piece from his puppet/Dracula/rock opera. He plays the song and sings like Dracula. Rachel thinks it's great and half the people like it, the other half don't seem to get it. Rachel drives him back to the hotel and both agree that they had a nice time. He leans over to kiss her but she moves away because she doesn't want to complicate things.
Peter goes up to the bar and Chuck is sitting there with Darald. Chuck doesn't have any idea who Peter is any more. Peter tells them that he just had a date with Rachel but they pooh pooh the idea and say that's not possible. The bartender says that she's in customer service and that he probably thinks strippers like him too. Darald's wife comes down and drags him back to their bed.
The next day, Sarah and Aldous are in their room when Sarah gets a phone call. She finds out that her show has been cancelled and she's somewhat upset. She tells Aldous and he's happy because he thinks she'll go on tour with him now. She gets upset because he had not told her he was going on an 18 month tour of Europe and he's leaving in two weeks. She tells him she can't go because she's a working actress. He says she's not employed anymore and she can be the head of his groupies. Shes upset that he didn't tell her about the tour and he adds that he didn't tell her that he has genital herpes because hes not having an outbreak.
Peter sees Sarah sitting alone at the bar. She tells him about the show and he asks her if she's doing okay. She says yes but he tells her to cut the bull because shes not on The View. She tells him she's upset about it and doesn't want to fade out of sight. He makes some jokes and cheers her up. He has a flashback to him singing his rock opera song to her and she tells him that she doesn't get it.
Later, Peter goes up to Rachel and she asks him if he wants to hang out again that afternoon. He says he wants to go for a hike and asks her to come. She agrees but as they're leaving they run into the bartender who's dressed in a wetsuit, he wants Peter to go snorkelling with him but Rachel drags him off laughing towards the trail. Sarah witnesses this and looks thoughtful.
Peter and Rachel walk up to top of a cliff that overlooks the bay. He talks about the fact that they are similar because they've both been hurt. They feel impervious to pain. Like they could just jump off the cliff into the water and not get hurt. Rachel says they should just do it. Peter thinks this is a metaphor for them kissing and leans in to kiss Rachel as she jumps off the cliff into the water. She tells him he should jump too. He tries to jump but ends up half falling and almost killing himself. He eventually lets go and is not hurt. Rachel kisses him.
Sarah goes up to Rachel at the front desk and asks if there's a good Sushi place around there. She tells Rachel she saw Rachel and Peter together and that Peter is really great guy. Sarah tells Rachel that she's really pretty and then starts to cry.
The next day Peter wakes up and BG is standing over him (another naked shot of Jason Segel). Dakota Fanning needs the suite so Peter is going to have to move to a different room. The next shot is him in the patio next door to Sarah. He tells her it was the only room available.
Darald asks Aldous how he can please his wife. Aldous shows Darald how to have sex with his wife using giant chess pieces out on the beach.
Meanwhile Peter goes up to Chuck and tells him hes ready to surf. Chuck gives him the board and he paddles out into the water. Aldous is out there and they talk about the song Peter is writing. Aldous likes it. They talk about Sarah and Peter mentions they were together for five years. Aldous says that Peter has four years on him meaning that Aldous and Sarah were having sex for a year before she broke things off with Peter. Peter is royally angry and tells Aldous to get out of there. Peter finally is able to get on his surfboard when a wave comes up but he surfs right over Aldous and knocks him off his board. Peter pulls Aldous out of the water and Aldous is yelling that his leg hurts. There is a piece of coral in his leg which Peter pulls out. As soon as he does, the wound starts gushing blood which causes Peter to faint.
Peter wakes up in Sarah's room and she is sitting beside him. She did not want him to wake up by himself. He confronts her about her cheating on him and starts to storm out. She asks him to stay and talk to her and he does. She tells him that she tried really hard, but that she couldn't get him to come out of his shell. That he spent an entire week in sweat pants (funny montage of Peter in the same pair of sweat pants doing different things). She says she talked to a therapist, read books, and talked to her mom to try to help him, but she couldn't pull him out of his house. He storms off around the corner to his patio.
That evening Sarah and Aldous are getting dressed for dinner. Aldous comes out in a sheer black shirt. Sarah wonders why he's not wearing the shirt she bought for him. He clearly does not want to wear it and Sarah remembers all the times she bought tacky clothes for Peter to wear and he wore them proudly because she had given them to him. The next scene is Aldous wearing a very tacky Hawaiian shirt that Sarah apparently bought for him and the two of them are walking towards the restaurant. He's upset about having to wear the shirt.
As they walk up, Peter and Rachel are standing in line in front of them. The host Matthew just gave the last table to Rachel and Peter and is very upset that he has to tell his idol Aldous that he'll have to wait five minutes for a table. Peter offers to let them sit with them which Sarah promptly accepts. Peter tells Rachel that he's sorry, he didn't think they would say yes. Rachel did think Sarah would say yes. Neither Rachel nor Aldous are very happy.
Dinner is awkward although there is a really funny scene where they make fun of a movie Sarah made about cell phones that kill people (Kristen Bell starred in a movie called Tone which was about cell phones that killed people it didn't do very well at the box office). Everyone (except Aldous) is drinking way too much wine. Aldous tells the table that his theory of life is that you should have sex with as many people as possible as much as possible. Peter disagrees. Sarah is very upset at this point and takes it out on Rachel by saying something bitchy. Rachel responds with something equally bitchy and then leans over and kisses Peter. Sarah is not happy. There is also a montage during this scene of Darald and his wife having sex in many different positions and clearly enjoying it.
The next scene is Peter and Rachel making out in his room. He tells her she's too drunk but she wants to have sex anyway. They start to have sex and Sarah hears them in the next room. She wakes up Aldous so that he'll have sex with her. She fakes an orgasm and yells really loud. Peter yells back while he and Rachel have sex.
Aldous pushes Sarah off of him and is very offended that she faked an orgasm with him. He says she isn't over Peter and that he's going to leave. Sarah gets mad and tells him that all of his tattoos are stupid and he responds by telling her that he had sex with their housekeeper.
Peter and Rachel wake up and agree that they really like spending time together. Peter then has a really fun day. He doesn't have anything to drink and is the life of the party at the pool. He runs into Aldous in the lobby and Aldous tells him that he and Sarah broke up. Aldous thinks Peter wants Sarah back but Peter doesn't think that he does.
Peter goes to Sarah's room to see how she's doing. She starts to cry and tells him she wants him back. She tries to kiss but he tells her no. Finally she says that she's really sorry so he starts to kiss her back. They try to have sex, but he's not turned on by her anymore. She even tries to give him a blow job, but it doesn't work.
Peter goes and tells Rachel what he did and she's incredibly hurt. She tells him not contact her ever again. Peter goes to the bar and takes the picture of her out of the bathroom. The bartender comes in and beats the tar out of him but he keeps the picture. He goes back to the hotel and gives her the picture without a word and then leaves.
Peter goes back home and finishes his rock opera. Rachel gets a flyer in the mail with the advertisement for the play. She doesn't think she wants to go but the bar tender convinces her that Peter clearly loves her and she should give him another shot.
The next scene is opening night of the rock opera. We get to see the closing scene and song of the play which is rather comical. Peter sees Rachel sitting in the audience and is very happy. Everyone likes the show and it gets a standing ovation. He meets up with Rachel after the show and she says shes in town to look at schools. He asks if she wants to hang out with him and she says yes. He asks if she still has his number. She leaves and he goes to the dressing room to take off his unitard. Rachel comes back to the dressing room just as he tries to call her. He's naked again and the audience again gets a full frontal view. Rachel laughs and they hug and evidently live happily ever after.
During the credits there is an advertisement for Sarah Marshall's new TV show. It looks super cheesy and she plays a detective that can channel her dog's mind.