Two women find their friendship is tested when one rises from obscurity to success while the other stagnates in a stalled career. Liz Hamilton, a young woman with literary ambitions, and Merry Noel Blake, an all-American blonde beauty from Atlanta, are close friends who met while they were freshmen at Smith College in the 1950s.
Soon after graduation, Liz writes a critically acclaimed book and drifts into unfulfilling relationships and one-night stands, including an empty encounter in an airplane lavatory, a fling with a teenaged hustler and an affair with Chris Adams, a young reporter for Rolling Stone. Meanwhile, Merry fulfills her aspiration to a life of domesticity caring for a husband and child by marrying Doug Blake and moving to a beach house in Malibu.
Although Merry is happy, she can’t help but envy Liz for her glamorous career as an author. Merry decides to write a book of her own and, with Liz’s assistance, A House by the Sea, a trashy roman à clef about the Malibu colony, finds a publisher and becomes a huge best-seller. Before long Merry is a darling of the media and her fame and fortune surpass those of Liz (who is experiencing a severe case of writer’s block), leading to jealousy between the old friends and problems in Merry’s marriage.
The film takes place over the course of 22 years, first depicting Merry’s and Doug’s elopement in 1959, and then picking up during three segments, taking place in 1969, 1975 and 1981, showing changes in the characters’ relationships (and society) over the course of two decades.