Kathleen Kelly is in a relationship with Frank Navasky, a left-leaning newspaper writer for The New York Observer who is always in search of an opportunity to root for the underdog. While Frank is devoted to his typewriter, Kathleen prefers her laptop and logging into her AOL email account. Using the screen name "Shopgirl", she reads an email from "NY152", the screen name of Joe Fox, whom she first met in an "over-30s" chatroom. As her voice narrates her reading of the email, she reveals the boundaries of the online relationship: no specifics, including no names, career or class information, or family connections.
Joe belongs to the Fox family that runs Fox Books, a chain of mega bookstores. Kathleen runs the independent bookstore The Shop Around The Corner that her mother ran before her. The two are shown passing each other on their respective ways to work, revealing that they frequent the same neighborhoods in the Upper West Side of Manhattan. Joe arrives at work, overseeing the opening of a new Fox Books in New York City with the help of his best friend, branch manager Kevin. Kathleen and her three store assistants, George, Aunt Birdie, and Christina, open up her small shop that morning.
Following a day with his 11-year-old aunt Annabel and 4-year-old half-brother Matthew, Joe enters Kathleen's store to let his younger relatives experience story time. Joe and Kathleen have a conversation that reveals Kathleen's fears about the Fox Books store opening around the corner. He omits his last name and makes an abrupt exit with the children. At a publishing party for New York book business people later that week, Joe and Kathleen meet again where Kathleen discovers Joe's true identity in the Fox family. She accuses him of deception and spying, while he responds by belittling her store.
When "Shopgirl" and "NY152" finally decide to meet, Joe discovers with whom he has been corresponding. At the table, he joins her without revealing his online identity, leading them to clash once more. NY152 later resumes the online correspondence, apologizes, and promises to eventually tell her why he stood her up.
The Shop Around the Corner slowly goes under. Kathleen's employees move on: Christina goes job hunting, George gets a job at the children's department at the Fox Books store, and Birdie retires. Kathleen and Frank amicably end their relationship. Kathleen takes a break to figure out what she wants to do (write children's books). As the shop goes under, Joe realizes his feelings towards Kathleen and begins building a face-to-face relationship, still keeping his online identity a secret. They slowly build a friendship.
Eventually, NY152 arranges a meeting between his online persona and Shopgirl, but right before she is to meet her online friend, Joe reveals his feelings for Kathleen. Upon arriving at the meeting place, she hears his voice, and sees that NY152 is, in fact, Joe Fox. Kathleen cries tears of joy and reveals that she hoped it would be him.
Tom Hanks as Joe Fox
Meg Ryan as Kathleen Kelly
Katie Sagona as Young Kathleen Kelly
Parker Posey as Patricia Eden
Jean Stapleton as Birdie
Dave Chappelle as Kevin
Steve Zahn as George
Dabney Coleman as Nelson Fox
Greg Kinnear as Frank Navasky
Heather Burns as Christina
John Randolph as Schuyler Fox
Deborah Rush as Veronica Grant
Hallee Hirsh as Annabel
Jeffrey Scaperrotta as Matt
Kathryn Meisle as Cecilia Kelly