While stuck in Los Angeles traffic, aspiring actress Mia Dolan has a moment of road rage with Sebastian Wilder, a struggling jazz pianist. After a bad day at work, Mia's subsequent audition goes poorly when the casting director takes a call in the middle of an emotional scene. That night, Mia's roommates take her to a lavish party in the Hollywood Hills, promising her that someone in the crowd could jump-start her career; but she is forced to walk home in disappointment after her car is towed.
During a gig at a restaurant, Sebastian slips into a jazz improvisation despite warnings from the owner to only play songs from a traditional Christmas setlist. Mia overhears him playing as she passes by. Moved, she enters the restaurant, but Sebastian is fired for his disobedience. As he storms out, Mia attempts to compliment him, but he brushes her off.
Months later, Mia runs into Sebastian at a party where he plays in a 1980s pop cover band. After the gig, the two walk to their cars and lament wasting a lovely night together despite the clear chemistry between them.
Sebastian arrives at Mia's work, and she shows him around the movie studio backlot, where she works as a barista, while explaining her passion for acting. Sebastian takes Mia to a jazz club, describing his passion for jazz and his desire to open his own club. Sebastian invites Mia to a screening of Rebel Without a Cause; Mia accepts, forgetting a commitment with her boyfriend Greg. Bored with the latter date, she goes to the theater and finds Sebastian as the film begins. The two conclude their evening with a romantic dance at the Griffith Observatory.
After more failed auditions, Mia decides, at Sebastian's suggestion, to write a one-woman play. Sebastian begins to perform regularly at a jazz club, and the two move in together. Sebastian's former classmate Keith invites him to be the keyboardist in his jazz fusion band, where he will enjoy a steady income. Although he is dismayed by the band's pop style, Sebastian signs after overhearing Mia trying to convince her mother that Sebastian is working on his career. The band finds success, but Mia attends one of their concerts and realizes that this is not the type of music Sebastian wants to perform.
During the band's first tour, Mia and Sebastian get into an argument; she accuses him of abandoning his dreams, while Sebastian claims she liked him more when he was unsuccessful. Sebastian misses Mia's play due to a band photo shoot that he had forgotten about. The play is a disaster; few people attend, and Mia overhears dismissive comments. Mia is unwilling to forgive Sebastian for missing the play and ends their relationship. Despondent and unable to pay the theater back, Mia moves back home to Boulder City, Nevada.
Sebastian receives a call from a prominent casting director who attended Mia's play and wants to invite her to a film audition. Sebastian drives to Boulder City and persuades Mia to attend. During the audition, Mia is asked simply to tell a story; in response, she sings "Audition (The Fools Who Dream)," a story about her aunt's lost loves. Sebastian, confident the audition was a success, encourages Mia to devote herself to film acting. The two profess they will always love each other but are uncertain of their future.
Five years later, Mia is a famous actress and happily married to another man, with whom she has a daughter. One night, the couple stumble upon a jazz bar. Noticing the "Seb's" logo she had once designed, Mia realizes Sebastian has opened his club. When Sebastian notices Mia in the crowd, he plays their love theme on the piano, and a dream sequence unfolds in which the two imagine what might have been had their relationship continued. Mia shares a poignant smile with Sebastian, then leaves with her husband.