Sense and Sensibility follows the story of the elder Dashwood sisters Elinor and Marianne after their father dies. The girls, along with their mother, must adjust to a modest lifestyle after they are left penniless by their half brother, but nonetheless manage to make a new life for themselves as they are introduced to neighbors like Colonel Brandon and John Willoughby. Both eventually find love and happiness in this novel also serves as a commentary about the social expectations during Jane Austen's time and the value of common sense.
When Mr Henry Dashwood dies, his house, Norland Park, passes directly to his son John, the child of his first wife. His second wife, Mrs Dashwood, and their daughters, Elinor, Marianne and Margaret, inherit only a small income. On his deathbed, Mr Dashwood extracts a promise from his son, to take care of his half-sisters; John's greedy wife, Fanny, soon persuades him to renege on the promise. John and Fanny immediately move in as the new owners of Norland, while the Dashwood women are treated as unwelcome guests. Mrs Dashwood seeks somewhere else to live. In the meantime, Fanny's brother, Edward Ferrars visits Norland and soon forms an attachment with Elinor. Fanny disapproves of the match and offends Mrs Dashwood with the implication that Elinor is motivated by money.
Mrs Dashwood moves her family to Barton Cottage in Devonshire, near the home of her cousin, Sir John Middleton. Their new home is modest; they are warmly received by Sir John, and welcomed into local society— meeting his wife, Lady Middleton, his mother-in-law, Mrs Jennings and his friend, Colonel Brandon. Colonel Brandon is attracted to Marianne, and Mrs Jennings teases them about it. Marianne is not pleased as she considers the thirty-five-year-old Colonel Brandon an old bachelor, incapable of falling in love or inspiring love in anyone else.
Marianne, out for a walk, gets caught in the rain, slips and sprains her ankle. The dashing John Willoughby sees the accident and assists her. Marianne quickly comes to admire his good looks and outspoken views on poetry, music, art and love. His attentions lead Elinor and Mrs Dashwood to suspect that the couple are secretly engaged. Elinor cautions Marianne against her unguarded conduct, but Marianne refuses to check her emotions. Abruptly, Mr Willoughby informs the Dashwoods that his aunt is sending him to London on business, indefinitely. Marianne is distraught and abandons herself to her sorrow.
Edward Ferrars pays a short visit to Barton Cottage but seems unhappy. Elinor fears that he no longer has feelings for her, but will not show her heartache. After Edward departs, Anne and Lucy Steele, the cousins of Lady Middleton, come to stay at Barton Park. Lucy informs Elinor of her secret four-year engagement to Edward Ferrars, displaying proofs. Elinor understands Edward's recent behaviour towards her and acquits him of blame. She pities Edward for being held to a loveless engagement by his sense of honour.
Elinor and Marianne accompany Mrs Jennings to London. On arriving, Marianne rashly writes several personal letters to Willoughby, which go unanswered. When they meet at a dance, Mr Willoughby greets Marianne reluctantly and coldly, to her extreme distress. Soon Marianne receives a curt letter enclosing their former correspondence and love tokens, including a lock of her hair and informing her of his engagement to a young lady with a large fortune. Marianne is devastated, and tells Elinor that she and Willoughby were never engaged, but she loved him and thought that he loved her. Colonel Brandon reveals to Elinor that Willoughby had seduced Brandon's fifteen-year-old ward, Miss Williams, then abandoned her when she became pregnant. Brandon had been in love with her mother, who had been his father's ward and who had been forced into an unhappy marriage to his brother; Marianne strongly reminds him of her.
The Steele sisters come to London as guests of John and Fanny Dashwood. Lucy sees her invitation to the Dashwoods' as a personal compliment, rather than what it is, a slight to Elinor. Too talkative, Anne Steele betrays Lucy's secret. As a result, the Misses Steele are turned out of the house, and Edward is ordered to break off the engagement on pain of disinheritance. Edward refuses to comply and is immediately disinherited in favour of his brother, gaining respect for his conduct, and sympathy from Elinor and Marianne. Colonel Brandon shows his admiration by offering Edward the living of Delaford parsonage.
Mrs Jennings takes Elinor and Marianne to the country to visit her second daughter. In her misery over Willoughby's marriage, Marianne becomes dangerously ill. Willoughby arrives to repent and reveals to Elinor that his love for Marianne was genuine. When his aunt learned of his behaviour towards Miss Williams and disinherited him, he chose to marry for money rather than love. He elicits Elinor's pity because his choice has made him unhappy.
When Marianne recovers, Elinor tells her of Willoughby's visit. Marianne realises that she could never have been happy with Willoughby's immoral and expansive nature. She values Elinor's conduct in her similar situation and resolves to model herself after Elinor's courage and good sense. Edward arrives and reveals that, after his disinheritance, Lucy jilted him in favour of his now wealthy brother, Robert. Edward and Elinor soon marry, and later Marianne marries Colonel Brandon, having gradually come to love him.