Algernon "Algy" Moncrieff (RUPERT EVERETT) and John "Jack" Worthing (COLIN FIRTH) are two bachelors living in 1890's England who've fabricated fictional characters for their own advantage and convenience. Algy, the dashing and charming but always broke nephew of haughty Lady Bracknell (JUDI DENCH), always gets out of social engagements he'd rather not attend by saying he has to tend to his ailing but entirely fictitious friend, Bunbury.
Jack, on the other hand, has informed his country estate staff that he has a scoundrel of a brother named Earnest that he must constantly bail out of trouble, but uses that name for himself whenever he's in the city. In fact, Algy always knew him as Earnest, and this revelation piques his curiosity about Jack's "other life" that includes caring for his young ward, Cecily Cardew (REESE WITHERSPOON), who's always being tutored by Miss Prism (ANNA MASSEY).
Meanwhile, Jack is enamored with Algy's cousin, Gwendolen Fairfax (FRANCES O'CONNOR), and would like to propose to her, but Lady Bracknell will have no part of that, particularly when she learns that Jack has no proper heritage. To try to remedy that, he then sets out to discover the identity of his parents, but is interrupted when Algy shows up at his country estate posing as his brother Earnest.
That pleases Cecily as she's always fantasized about the ruffian she's never met, but things become more complicated when Gwendolen decides to pay Jack a visit, particularly since both women think both men are named Earnest. As Miss Prism deals with her own potential romance with the local rector, Rev. Canon Chasuble (TOM WILKINSON), the two men must deal with the consequences of their respective and collective ruses.