Adapted from the classic novel, the main events of this movie take place in the summer of 1922. Nick Carraway, a Yale graduate and World War I veteran from the Midwest – who serves as the novel's narrator – takes a job in New York as a bond salesman. He rents a small house on Long Island, in the (fictional) village of West Egg, next door to the lavish mansion of Jay Gatsby, a mysterious millionaire who holds extravagant parties but does not participate in them. Nick drives around the bay to East Egg for dinner at the home of his cousin, Daisy Fay Buchanan, and her husband, Tom, a college acquaintance of Nick's. They introduce Nick to Jordan Baker, an attractive, cynical young golfer with whom Nick begins a romantic relationship. She reveals to Nick that Tom has a mistress, Myrtle Wilson, who lives in the "valley of ashes": an industrial dumping ground between West Egg and New York City.
Not long after this revelation, Nick travels to New York City with Tom and Myrtle to an apartment they keep for their affair. At the apartment, a vulgar and bizarre party takes place. It ends with Tom breaking Myrtle's nose after she annoys him by saying Daisy's name several times.
As the summer progresses, Nick eventually receives an invitation to one of Gatsby's parties. Nick encounters Jordan Baker at the party, and they meet Gatsby himself, an aloof and surprisingly young man who recognizes Nick from their same division in the war.
Through Jordan, Nick later learns that Gatsby knew Daisy from a romantic encounter in 1917 and is deeply in love with her. He spends many nights staring at the green light at the end of her dock, across the bay from his mansion, hoping to one day rekindle their lost romance.
Gatsby's extravagant lifestyle and wild parties are an attempt to impress Daisy in the hopes that she will one day appear again at Gatsby's doorstep. Gatsby now wants Nick to arrange a reunion between himself and Daisy. Nick invites Daisy to have tea at his house, without telling her that Gatsby will also be there.
After an initially awkward reunion, Gatsby and Daisy reestablish their connection. They begin an affair and, after a short time, Tom grows increasingly suspicious of his wife's relationship with Gatsby. At a luncheon at the Buchanans' house, Daisy speaks to Gatsby with such undisguised intimacy that Tom realizes she is in love with Gatsby.
Though Tom is himself involved in an extramarital affair, he is outraged by his wife's infidelity. He forces the group to drive into New York City and confronts Gatsby in a suite at the Plaza Hotel, asserting that he and Daisy have a history that Gatsby could never understand. In addition to that, he announces to his wife that Gatsby is a criminal whose fortune comes from bootlegging alcohol and other illegal activities. Daisy realizes that her allegiance is to Tom, and Tom contemptuously sends her back to East Egg with Gatsby, attempting to prove that Gatsby cannot hurt him.
When Nick, Jordan, and Tom drive through the valley of ashes on their way home, they discover that Gatsby's car has struck and killed Tom's mistress, Myrtle. Nick later learns from Gatsby that Daisy, not Gatsby himself, was driving the car at the time of the accident but Gatsby intends to take the blame anyway.
Myrtle's husband, George, falsely concludes that the driver of the yellow car is the secret lover he recently began suspecting she has, and sets out on foot to locate its owner. After finding out the yellow car is Gatsby's, he arrives at Gatsby's mansion where he fatally shoots both Gatsby and then himself. Nick stages an unsettlingly small funeral for Gatsby, ends his relationship with Jordan, and moves back to the Midwest, disillusioned with the Eastern lifestyle.