Barbara Covett (Dame Judi Dench) is a veteran and cynical schoolteacher who is close to retirement. She is barely tolerated by her less brilliant and acerbic colleagues who know nothing about her private life which consists mainly of taking care of Portia, her aging cat, and spending countless hours alone. The only means she has found to take the edge off her desperate loneliness is writing in her journal. When Sheba Hart (Cate Blanchett), a younger, attractive woman, joins the faculty as an art teacher, Barbara watches her from afar and has nothing but caustic things to say in her diary about her clothing and her care-free manner. Despite her disdain for this woman, Barbara finds herself reaching out to her. Sheba responds by inviting her to dinner at her house to meet Sheba's lecturer husband (Bill Nighy), who is twenty years her senior, and their two children, a sexy and rebellious 16-year-old daughter and a younger boy with Downs Syndrome. Instead of opening herself to these people, Barbara immediately sees them as competition to be beaten in the battle for Sheba's attention. Later, when Barbara discovers her new friend in a classroom having sex with Steven (Andrew Simpson), a 15-year-old from the school who has artistic talent; she realizes that knowledge of this secret gives her power over Sheba which she can use for her own purposes. Barbara promises to not tell anyone but insists that the affair must end immediately. Sheba says she will but finds herself drawn back to the boy again and again. Sheba seems uneasy with Barbara's friendship and is appalled when she discovers the older woman might have a sexual interest in her. The tenuous relationship between the two women reaches a crisis point when Barbara's cat is dying and she asks Sheba to go with her to the vet. She chooses to go with her family to see their son in a play instead. In revenge, Barbara sets in motion the scandal that will rock both their lives in ways they never imagined.
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