Charlie (Logan Lerman) has recently been discharged from a mental healthcare hospital where he was treated for depression, something he has been suffering from since childhood. It is time for him to transition back into normal school but he is shy and doesn't make friends easily and so he is nervous and apprehensive about the start of school. He has an anonymous pen pal to whom he writes about his feelings. On his first day at school he is teased by his classmates but likes his English teacher, Mr Anderson (Paul Rudd). However, he doesn't really make any friends and ends up attending a football game by himself. He notices Patrick from his shop class (Ezra Miller) the only senior in a class of freshmen. Patrick notices Charlie and asks him to sit with him and his step-sister Sam (Emma Watson). Charlie is immediately attracted to Sam. He gets along with both Sam and Patrick and they invite him to attend some social events with him.
When he gets home he witnesses his sister Candace being hit by her boyfriend. Charlie feels strongly about domestic abuse because their Aunt Helen (Melanie Lynskey) but Candace persuades him to keep what he has seen a secret from their parents.
At homecoming, Charlie dances with Sam and Patrick and also goes to a party with them afterwards. At the party they introduce him to some more of their friends, Bob, Mary Elizabeth and Alice. Charlie also meets Sam's boyfriend Craig and feels enormous jealousy when he sees them together. Charlie eats his first pot brownie and amuses everyone with his sudden wit and insightful observations. He tells Sam that his best friend shot himself the previous year and whilst she is still processing this he leaves her to go upstairs. Once upstairs, he sees Patrick kissing Brad (Johnny Simmons) who is the star of the school football team. Patrick tells Charlie that Brad doesn't want anyone to find out about their relationship, least of all his father, because he would disapprove. Patrick asks Charlie to keep it a secret. Later, Sam tells Patrick what Charlie told her about his best friend and they welcome him into their group of friends, realizing that he doesn't really have any others.
Charlie is helping Sam study for her SATs, and as Christmas nears, they go to a party; on their drive home they hear a song that none of them know, so Sam instructs Patrick to drive through the tunnel so that she can stand up in the back of their pick-up and dance whilst the music is blasting out loud. Another nice holiday happenning is that their group participates in a secret Santa gift exchange. On the final night of the exchange Sam gives Charlie her gift - a typewriter. She thinks that it will help him because he wants to be a writer. They start to chat about first kisses, and Charlie tells her that he has not had his first kiss yet. He has never kissed a girl. Sam, meanwhile, tells him that her first kiss was from her father's boss who was molesting her at the time. She wants different for Charlie; she wants his first kiss to be from somebody who loves him, and then she kisses him. Charlie is already in love with Sam and wants to find a way to show her this even though she is dating someone else.
Charlie's birhday is on Christmas Eve, which always makes him thihk about his Aunt Helen, who died in a car accident on Christmas Eve after picking up a present for him. He is still hugely troubled by his Aunt's death and when he takes LSD at a New Year's Eve party, he has flashbacks to the night she died. He is found by police passed out in the snow.
Charlie goes to the Sadie Hawkins dance with Mary Elizabeth, and afterwards they go to her house to make out. She declares that he is now her boyfriend. Charlie doesn't want to be her boyfriend and has no interest in her but continues the relationship because he has no idea how to break up with somebody.
At another party, during a game of Truth or Dare, Patrick dares Charlie to kiss the prettiest girl in the room. He kisses Sam which enrages both Sam and Mary Elizabeth - after all, when challenged to kiss the prettiest girl in the room it is traditional to kiss one's own girlfriend. Patrick advises him to give them both some space whilst things cool down. Weeks go by and still his friends ignore him, which plunges him back into his depression, and to make matters worse his flashbacks to the night of his aunt's death are continuing to haunt him.
Brad's father caught Brad and Patrick having sex, which explains the bruise on Brad's face at school that day, but Brad claims steadfastly that he has bruises on his face because he was jumped in the school parking lot. Brad calls Patrick a faggot after the two get into a fight in the school cafeteria, and Brad's friends get involved, beating up Patrick until Charlie intervenes, which leads to reconciliation with his friends.
Patrick is upset about the end of his relationship with Brad, but becomes close with Charlie. One night he kisses Charlie, who doesn't react. He then breaks down and tells Charlie how unhappy he is. Sam finds out that Craig has been cheating on her and breaks up with him.
As graduation nears, Sam is accepted by Penn State and her friends throw a leaving party for her. Charlie helps her pack. Sam asks him why he never asked her out and one thing leads to another; they kiss but Charlie pulls away when Sam touches him on his inner thigh. He claims that nothing is wrong and continues to kiss her but she is concerned that something might be wrong. The following day as he watches her leave for school he feels very uncomfortable, and once home, has a breakdown, and flashes back to his Aunt Helen touching his thigh in the same way Sam had the night before. He calls Candace and tells her that it's his fault his Aunt died, because maybe he wanted her to and the universe manifested what he wanted. Candace sends police to the house, worried that Charlie is going to harm himself, and when they arrive he blacks out.
Charlie wakes up in the hospital. His physician (Joan Cusack) explains to his parents (Kate Walsh and Dylan McDermott) that Charlie was being molested by Aunt Helen and that he repressed the memory because he blamed himself for her death. When he is discharged from hospital a few weeks later Sam and Patrick take him out to one of the group's favorite restaurants. They drive into a tunnel and Sam tells Charlie that she has found the song that they were playing the last time they all drove through the tunnel - "Heroes" by David Bowie. Charlie climbs into the back of the truck to think about life as a whole, and kisses Sam, standing up and screaming as they exit the tunnel. For the first time he feels truly alive.
