In 2005, elderly Daisy Fuller is on her deathbed in a New Orleans hospital as Hurricane Katrina approaches; she asks her daughter, Caroline, to read aloud from the diary of Benjamin Button.

From the reading, it is revealed that on the evening of November 11, 1918, a boy was born with the appearance and physical maladies of an elderly man. The baby's mother died after giving birth, and the father, Thomas Button, abandons the infant on the porch of a nursing home. Queenie and Mr. "Tizzy" Weathers, workers at the nursing home, find the baby, and Queenie decides to care for him as her own.

Benjamin learns to walk in 1925; he declares it a miracle, after which he uses crutches in place of a wheelchair. On Thanksgiving 1930, Benjamin meets seven-year-old Daisy, whose grandmother lives in the nursing home. He and Daisy become good friends. Later, he accepts work on a tugboat captained by Mike Clark. Benjamin also meets Thomas Button, who does not reveal that he is Benjamin's father. In Autumn 1936, Benjamin leaves New Orleans for a long-term work engagement with the tugboat crew; Daisy later is accepted into a dance company in New York Cityunder choreographer George Balanchine.

In 1941, Benjamin is in Murmansk, where he begins having an affair with Elizabeth Abbott, wife of the British Trade Minister. That December, Japan attacks Pearl Harbor, thrusting the United States into World War II. Mike volunteers the boat for the U.S. Navy; the crew is assigned to salvage duties. During a patrol, the tugboat finds a sunken U.S. transport and the bodies of many American troops. A German submarine surfaces; Mike steers the tugboat full speed towards it while a German gunner fires on the tugboat, killing most of the crew, including Mike. The tugboat rams the submarine, causing it to explode, sinking both vessels. Benjamin and another crewman are rescued by U.S. Navy ships the next day.

In May 1945, Benjamin returns to New Orleans and reunites with Queenie. A few weeks later, he reunites with Daisy; they go out for dinner. Upon failing to seduce him afterward, she departs. Benjamin later reunites with Thomas Button, who, terminally ill, reveals he is Benjamin's father and wills Benjamin his button company and his estate.

In 1947, Benjamin visits Daisy in New York unannounced but departs upon seeing that she has fallen in love with someone else. In 1954, Daisy's dancing career ends when her leg is crushed in an automobile accident in Paris. When Benjamin visits her, Daisy is amazed by his youthful appearance, but, frustrated by her injuries, she tells him to stay out of her life.

In spring 1962, Daisy returns to New Orleans and reunites with Benjamin. Now of comparable physical age, they fall in love and go sailing together. They return to learn that Queenie has died, then move in together. In 1967, Daisy, who has opened a ballet studio, tells Benjamin that she is pregnant; she gives birth to a girl, Caroline, in the spring of 1968. Believing he can not be a proper father to his daughter due to his reverse aging, Benjamin departs after selling his belongings, leaving a bank account book holding the proceeds behind for Daisy and Caroline; he travels alone during the 1970s.

Benjamin returns to Daisy in 1980. Now married, Daisy introduces him, as a family friend, to her husband and daughter. Daisy admits that he was right to leave; she could not have coped otherwise. She later visits Benjamin at his hotel, where they again share their passion for each other, then part once more.

In 1990, widowed Daisy is contacted by social workers who have found Benjamin—now physically a pre-teen. When she arrives, they explain that he was living in a condemned building and was taken to the hospital in poor physical condition, and that they found her name in his diary. The bewildered social workers also say he is displaying early signs of dementia. Daisy moves into the nursing home in 1997 and cares for Benjamin for the rest of his life. In the spring of 2003, Benjamin dies in Daisy's arms, physically an infant but chronologically 84 years of age. Having finally revealed the story of Caroline's father to her, Daisy dies as Hurricane Katrinaapproaches.