In 1996, treasure hunter Brock Lovett (Bill PaxtonBill Paxton) and his team explore the wreck of the RMS Titanic, searching for a necklace set with a valuable blue diamond called the Heart of the Ocean. They believe the diamond is in Caledon "Cal" Hockley's safe, which they recover. They do not find the diamond, but a sketch of a nude woman wearing the diamond. The drawing is dated April 14, 1912, the night the Titanic hit the iceberg. One-hundred-year-old Rose Dawson Calvert (Gloria Stuart) learns of the drawing and contacts Lovett, informing him that she is the woman in the drawing. She and her granddaughter Elizabeth "Lizzy" Calvert (Suzy Amis) visit Lovett and his team on his salvage ship. When asked if she knew the whereabouts of the necklace, Rose recalls her memories aboard the Titanic, revealing that she is Rose DeWitt Bukater, a passenger believed to have died in the sinking.
In 1912, the upper class 17-year-old Rose DeWitt Bukater (Kate WinsletKate Winslet) boards the ship in Southampton, England with her fiancé Caledon "Cal" Hockley (Billy ZaneBilly Zane), the son of a Pittsburgh steel tycoon, and her mother, Ruth DeWitt Bukater (Frances Fisher). Both Cal and Ruth stress the importance of Rose's engagement to Cal, since the marriage will mean the eradication of the Dewitt-Bukater debts; while they appear upper-class, Rose and her mother are experiencing severe financial troubles. Distraught and frustrated by her engagement to the controlling Cal and the pressure her mother is putting on her, Rose attempts suicide by jumping from the stern. Before she leaps, a drifter and artist named Jack Dawson (Leonardo DiCaprioLeonardo DiCaprio) intervenes. Cal, his friends and the sailors, overhearing Rose's screams, believe Jack attempted to rape her. She explains that Jack saved her life, hiding her suicide attempt by claiming she slipped while trying to see the propellers. Jack supports Rose's story, though Hockley's manservant, former Pinkerton agent Spicer Lovejoy (David Warner), is unconvinced. Jack and Rose develop a tentative friendship. Their bond deepens when they leave a stuffy first-class formal dinner of the rapport-building wealthy for a much livelier gathering in third-class.
Lovejoy informs Cal of Rose's partying, and during breakfast the following morning Cal forbids her to see Jack again. After witnessing a woman encouraging her seven-year-old daughter to behave like a "proper lady" at tea, Rose defies him and meets Jack at the bow of the ship. Rose opens herself up to Jack, sharing a passionate kiss. They go to Rose's stateroom where she asks Jack to sketch her wearing the Heart of the Ocean, an engagement present from Cal. Afterwards, the two run from Lovejoy, going into the ship's cargo hold. They enter William Carter's Renault and have sex in the backseat before moving to the ship's forward well deck. Rose decides she will leave the ship with Jack. After witnessing the ship's collision with an iceberg and overhearing the ship's lookouts discussing how serious it is, Rose tells Jack they should warn her mother and Cal. Cal has discovered Rose's drawing and her taunting note in his safe, so he frames Jack for stealing the Heart of the Ocean by having Lovejoy plant it in Jack's pocket. Jack is arrested, taken down to the Master-at-arms's office and handcuffed to a pipe. Rose runs away from Cal and her mother (who has boarded a lifeboat) to rescue Jack from imprisonment. Rose frees Jack with an axe.
Jack and Rose return to the boat deck. Cal and Jack both want Rose safe, so they persuade her to board a lifeboat, Cal claiming that he has an arrangement that will allow him and Jack to get off safely. After Rose is out of earshot, Cal admits that there is an arrangement, but he will not use it to help Jack. Realizing that she cannot leave Jack, Rose jumps back on the ship and reunites with him at the ship's first-class staircase. Infuriated, Cal takes Lovejoy's pistol and chases Jack and Rose into the flooding first-class dining saloon. When Cal runs out of ammunition, he sarcastically wishes them well, then realizes he left the Heart of the Ocean in Rose's overcoat. Cal abandons Lovejoy and returns to the boat deck, where he boards a lifeboat by pretending to look after an abandoned child. When Jack and Rose return to the top deck, the lifeboats have gone and they take refuge on the now-vertical stern, which washes them into the Atlantic Ocean. Jack and Rose grab hold of a door that only supports one person. Jack remains in the water, clinging to the door. As Rose accepts their fate, Jack assures her that she will live to have a long, happy life. As they await rescue, Jack freezes to death.
When a lifeboat finally returns to the site of the sinking, Rose is thinking of staying put and dying with Jack, but is then inspired by Jack's words and determined to live, blows a whistle taken from a nearby frozen crew member. Rose is taken by the RMS Carpathia to New York, where she gives her name as Rose Dawson. She sees Cal for the last time on Carpathia's deck, looking for her.
Having completed her story, the elderly Rose goes alone to the stern of Lovett's ship and drops the Heart of the Ocean into the water. As she sleeps, around her are pictures of her doing everything she said she would do with Jack throughout her life. The final shot of the film is of young Rose being reunited with Jack at the Grand Staircase of the Titanic, surrounded and applauded by those who perished on the ship; it is deliberately unclear if this is a conscious dream, or if Rose has died in her sleep.