In 1996, treasure hunter Brock Lovett and his team board the research vessel Akademik Mstislav Keldysh to search the wreck of RMS Titanic for a necklace with a rare diamond, the Heart of the Ocean. They recover a safe containing a drawing of a young woman wearing only the necklace dated April 14, 1912, the day the ship struck the iceberg.Rose Dawson Calvert, the woman in the drawing, is brought aboard Keldysh and tells Lovett of her experiences aboard Titanic.

In 1912 Southampton, 17-year-old first-class passenger Rose DeWitt Bukater, her fiancé Cal Hockley, and her mother Ruth board the luxurious Titanic. Ruth emphasizes that Rose's marriage will resolve their family's financial problems and allow them to retain their upper-class status. Distraught over the engagement, Rose climbs over the stern and contemplates suicide; Jack Dawson, a poor artist, intervenes and discourages her. Discovered with Jack, Rose tells a concerned Cal that she was peering over the edge and Jack saved her from falling. Cal becomes indifferent, and it is suggested to him that Jack be rewarded; he invites Jack to dine with them in first-class. Jack and Rose develop a tentative friendship, despite Cal, his valet Spicer Lovejoy, and Ruth, being wary of him. Following dinner, Rose secretly joins Jack at a party in third-class.

Aware of Cal and Ruth's disapproval, Rose rebuffs Jack's advances, but later realizes she prefers him over Cal. After rendezvousing on the bow at sunset, Rose takes Jack to her state room; at her request, Jack sketches Rose posing nude wearing Cal's engagement present, the Heart of the Ocean. They evade Lovejoy, and have sex in an automobile inside the cargo hold. On the forward deck, they witness the ship's collision with an iceberg and overhear its officers and builder discussing its seriousness.

Cal discovers Jack's sketch of Rose and an insulting note from her in his safe along with the necklace. When Jack and Rose attempt to inform Cal of the collision, Cal retaliates by having Lovejoy slip the necklace into Jack's pocket, accusing him of theft. Jack is arrested and restrained in the master-at-arms' office. Cal puts the necklace in his own coat pocket.

With the ship sinking, Rose flees Cal and her mother, who has boarded a lifeboat, and frees Jack. On the boat deck, Cal and Jack encourage her to board a lifeboat. While intending only to save himself, Cal claims he can ensure he and Jack get off safely. As her lifeboat lowers, Rose realizes she cannot leave Jack, and jumps back on board. Cal takes Lovejoy's pistol and chases Rose and Jack into the flooding first-class dining saloon. After using up his ammunition, he relents. Cal realizes he gave his coat, and consequently the necklace, to Rose. He later boards a lifeboat by carrying a lost child.

After braving several obstacles, Jack and Rose return to the boat deck. The lifeboats have departed and passengers are falling to their deaths as the stern rises out of the water. The ship breaks in half, dropping the stern into the water. Jack and Rose climb onto the back of it, and ride it into the ocean. He helps her onto a wooden panel buoyant enough for only one person. He assures her that she will die an old woman, warm in her bed. Jack dies of hypothermia,but Rose is saved by a returning lifeboat.

The RMS Carpathia later rescues the survivors; on board, Rose hides from Cal en route to New York City, where she gives her name as Rose Dawson. Rose says she later read that Cal committed suicide after losing his fortune in the Wall Street Crash of 1929.

Back in the present, Lovett decides to abandon his search after hearing Rose's story. Alone on the stern of Keldysh, Rose takes out the Heart of the Ocean, which was in her possession all along, and drops it into the sea over the wreck site. While she is seemingly asleep or has died in her bed,photos on her dresser depict a life of freedom and adventure. A young Rose reunites with Jack at Titanic's Grand Staircase, applauded by those who died on the ship.