Father Brian Finn (Edward Norton), dedicated to his calling as Catholic priest since childhood, shares the duties of his New York parish with the older Fr. Havel (Miloš Forman). Rabbi Jacob “Jake” Schram (Ben Stiller), best friends with Brian since they were children and the youngest rabbi at his synagogue, focuses on his work to the detriment of his private life, much to the chagrin of his mother, Ruth (Anne Bancroft). The two men show a close bond even in their professions, planning to open a jointly-sponsored community center. The pair reminisce about their childhood friend Anna Reilly (Jenna Elfman), meeting them in middle school after beating up a bully. The three were close friends until Anna’s family moved to California and they ultimately lost touch.
Sixteen years later, Anna moves to New York for work and calls Jake and Brian out of the blue, rekindling their friendship. Anna and Jake begin sleeping together, but he is reluctant to become seriously involved as she is not Jewish, which could compromise his relationship with his congregation and his mother Ruth, who disowned her eldest son for marrying outside the faith. Between this conflict and their desire to spare Brian’s feelings, the relationship is kept mostly secret. As the relationship continues, Jake remains unwilling to view the relationship as serious, despite Anna’s hints at her ‘taking a class’. She is upset when they run into members of Jake’s congregation while on a date, and Jake introduces her only as “my old friend Anna”.
Brian is in private turmoil after also developing feelings for Anna, in conflict with his vows. He misinterprets Anna’s words and actions – some of which are subtle signals to Jake – and even has an erotic dream about her. He seriously considers leaving the priesthood to pursue a romantic relationship with her. While the three have dinner with Ruth, she reveals to Anna that she knows about her and Jake’s secret relationship. Jake and Brian walk in on the tearful moment, and Jake and Anna later argue over the religious issues complicating their romance and part ways. Anna calls Brian for comfort and he rushes to her, taking her tearful ramblings to be a confession of feelings for him. When he kisses her and confesses his love, she interrupts him, admitting she is in love with Jake and they have been seeing each other secretly for months. Embarrassed and rejected, Brian spends the night drinking on the streets. Still drunk the next day, Brian stumbles into Jake’s temple and interrupts a post-bar mitzvah gathering, resulting in a confrontation with Jake that ends with the priest punching the rabbi.
As the Community Center’s grand opening approaches, along with the end of Anna’s East Coast assignment, Jake reconciles with Brian, as does Anna soon after. A discussion with Brian prompts Jake to go to Anna’s office building, with Brian shouting encouragement as he runs down the street. Interrupting Anna’s going-away party, Jake gets her attention from a window across the street, and calls to explain himself and offer to set things right. That evening, they surprise Brian in the middle of his karaoke number at the interfaith center. Anna greets Rabbi Lewis (Eli Wallach) and mentions their meetings together, revealing that she had been taking classes to convert to Judaism. She tells him she hopes to pick it up again as she is now staying in New York, with Jake clearly thrilled. The film ends with the three friends happily posing for a photo together.