Impoverished Roman Prince Amerigo is engaged to American socialite Maggie Verver. Maggie has a very close relationship with her millionaire father Adam, a widowed tycoon living in England who plans a museum in America to house his collection of art and antiquities.
Unbeknownst to his fiancée and prior to their engagement, Amerigo had a brief, passionate affair with Maggie’s friend Charlotte. Both penniless, Amerigo breaks off their affair due to his engagement. Charlotte is still in love with him when she visits mutual friend Fanny Assingham in London. Maggie invites her to the wedding, and at Maggie’s request, Amerigo takes Charlotte to an antiques shop to look for a wedding gift. The proprietor Jarvis shows them a bowl, carved from a single piece of rock crystal which he asserts is flawless. Amerigo notices a crack. Charlotte claims not to see the crack, only the bowl’s beauty. She is unsure whether to buy the bowl so Jarvis reserves it pending her decision.
Maggie and Amerigo have a son. Adam and Charlotte marry, much to Maggie’s delight. Three years pass and the two couples lives are closely interwoven, although Maggie and Adam’s closeness alienates their spouses. Fanny correctly suspects that Amerigo and Charlotte have rekindled their affair. Maggie also becomes suspicious and confides in Fanny, but Fanny, wanting to protect Maggie’s feelings, tries to discourage such thoughts. Adam also observes close interactions between Charlotte and Amerigo but stays silent, not wanting Maggie to be hurt.
Maggie looks for a birthday gift for her father in Jarvis’ shop, and chooses the bowl Jarvis had set aside for Charlotte years ago. Jarvis delivers it to her home. While there, he recognizes photographs of Amerigo and Charlotte and innocently reveals they were the couple who originally considered purchasing the bowl before the wedding. Maggie realizes that the two were not meeting for the first time, as she had always assumed, and vents her feelings to Fanny. Fanny breaks the glass bowl, saying it is the only proof of Amerigo and Charlotte being together, and she can pretend nothing happened. Maggie confronts Amerigo, who confesses. Maggie says the bowl represents their marriage, it appeared beautiful and perfect but was flawed. Amerigo begs Maggie not tell her father and not to leave. Maggie agrees not to tell her father for fear of hurting him but is unsure how she feels about her husband.
Adam is distant, and suggests to Charlotte that they return to America for the opening of his museum. She is strongly opposed. Tension grows when Amerigo and Maggie arrive with the Assinghams. Amerigo is distant to Charlotte who worries that Adam and Maggie know of the affair. Maggie and Adam agree to move apart from each other to protect their families. Maggie and Amerigo prepare for a permanent move to Italy, while Adam puts Charlotte in charge of packing the artifacts in preparation for their move to America. Charlotte begs Amerigo to run away with her but he rejects the idea and expresses guilt at being unfaithful and lying to his wife. Charlotte reconciles to being with Adam, and the film ends with the couple arriving to fanfare in an American city.