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Successful attorney Dan O'Mara visits the Greenwich Village apartment of his mistress, Daisy Kenyon, a magazine illustrator, to cancel a date, explaining that he has been summoned to Washington on business.  Daisy, upset, threatens to break off their relationship but soon relents.  As Dan leaves the building, he hails the taxi that discharges Peter Lapham, a soldier Daisy met at a party the previous evening, who has come to take her to dinner.

At his Park Avenue home, Dan argues with his nagging wife Lucile about her abusive treatment of their youngest daughter Marie.  That night, as Peter and Daisy wait for a table at the exclusive Stork Club, Dan enters with his family, and when he arranges for Daisy to get a table, Daisy, angered at his deception, insists on leaving.  As Peter walks Daisy home, he impetuously blurts out that he loves her and promises to call Sunday morning to take her to a baseball game.

When Peter has not called by midday Sunday, Daisy agrees to meet Dan, who is returning from Washington.  Dan informs Daisy that he is going to represent a young Japanese-American war hero whose farm had been confiscated by the U.S.  government.  When Dan tells Daisy that he must cancel their date to discuss the case with Coverly, his law partner and father-in-law, Daisy, annoyed, makes plans to go to a movie with her friend and model, Mary Angelus.

Soon after, Peter phones, and Daisy, still angry, refuses to see him.  Peter follows Daisy to the movie, and when she returns home, he pounds at her door and apologizes for forgetting to call her.  Confessing to Daisy that she has brought the only happiness into his life since the death of his wife Susy, and his brutal combat service in the war, he proposes and Daisy agrees to give him another chance.  After spending eighteen days in California working on the Japanese-American soldier's case, Dan returns to New York and discovers that Daisy has married Peter.  Later, the newlyweds move to Cape Cod, where Peter had lived with Susy and pursued a career as a ship builder.  One night, Peter awakens from a terrible nightmare about Susy and comments that Daisy has never told him that she loves him.

One rainy day, Daisy finally declares her love to Peter.  Soon after, Daisy is called to New York to work on a project and Peter stays behind to work on a boat.  Daisy moves into her old apartment with Mary, and one day, Dan, returning home from California after losing his case, absentmindedly gives the cab driver Daisy's address.  Although Daisy asks Dan to leave, he forces himself on her, and she breaks free just as Mary enters the room.

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Upon returning home, Dan sullenly locks himself in his study and Lucile, concerned, listens at the door and overhears Dan calling Daisy to apologize.  Picking up the extension phone, Lucile hears Dan profess his undying love to Daisy.  Stunned, Lucile breaks into the conversation and Dan, furious, threatens to kill her.  Later, Coverly informs Dan that Lucile wants a divorce and proposes that she be granted custody of their two daughters.  Dan refuses and then informs Coverly that he is withdrawing from their law firm.

Without Daisy's knowledge, Dan invites Peter to New York and takes him to meet Daisy at his private club.  There, Dan informs Daisy that Lucile intends to name her a co-respondent in their divorce case.  Peter, still unsure of Daisy's love, offers to free her from their marriage and abruptly leaves.  At the trial, Dan discovers that Lucile has unleashed her anger on Marie, battering the child's ear.  During Daisy's testimony, Lucile's lawyer begins to probe into her private life, and Dan, unable to tolerate her humiliation, realizes how much he loves her and agrees to grant Lucile a divorce on her terms.  Dan then sends for Peter and asks him to sign divorce papers so that he can marry Daisy.  Peter, dispirited, is about to sign when he learns that Daisy has not been consulted.

Daisy, meanwhile, decides to go to the Cape alone to sort out her feelings.  Upon discovering that Peter and Dan have followed her there, Daisy, panicked, speeds away in her car and flips it over on an icy road.  Stumbling out of the wreck in a daze, Daisy returns to the cabin to find Peter and Dan waiting to plead their cases.  As Peter waits outside in the cab that drove them to the cabin, Dan begs Daisy to marry him.  Daisy replies that her accident made her realize that she no longer loves him and that his first duty is to his children.  Defeated, Dan drives off in the cab as Peter rejoins Daisy in their cabin and they embrace.