In an unexpected twist of fate, Roberta Glass, a discontented housewife from Fort Lee, New Jersey, becomes captivated by the fervent exchanges between Susan Thomas and Jim Dandy found in the classified ads of a New York City tabloid. One ad particularly catches her eye: "Desperately Seeking Susan," which hints at a secret meeting in Battery Park, igniting Roberta's curiosity and imagination.
Susan, a mysterious free spirit, is also in tumultuous waters. After a passionate encounter with mobster Bruce Meeker in Atlantic City, she pilfers a pair of striking Egyptian earrings from his coat. Unbeknownst to her, the malevolent Wayne Nolan has taken special note of her glamorous tuxedo jacket as she leaves the hotel.
Upon her arrival in NYC, Susan wears one of the earrings and carefully stashes the other in a locker at the Port Authority. Seeking refuge with her friend Crystal, a magician's assistant at the Magic Club, she learns the shocking news that Meeker has met his end at the Atlantic City hotel.
Meanwhile, Roberta, intrigued, heads to Battery Park where she witnesses Jim reuniting with Susan right before he leaves for Buffalo. Later, Roberta follows Susan to a vintage shop where she sees Susan trade her distinctive jacket, but loses her in the crowd. When Roberta buys the jacket, she discovers Susan’s locker key nestled in its pocket, prompting her to post another "Desperately Seeking Susan" ad to reconnect with her.
As Jim grows increasingly worried about Susan's association with Meeker's death, he enlists his trusted friend Dez to investigate her whereabouts. While waiting at Battery Park wearing Susan's jacket, Roberta gets mistaken for Susan by Nolan due to their similar looks, resulting in a confrontation that ends with her being detained by the police for failing to settle her cab fare.
In a timely rescue, Dez arrives on his moped, saving Roberta and bringing her to the Port Authority to retrieve Susan's suitcase. There, she finds the other earring, setting off a whirlwind of events. Although Dez offers Roberta a place to sleep on his couch, he soon discovers it has been emptied by his ex-girlfriend, leaving him with little.
Embracing a misguided notion that she is becoming Susan, Roberta embarks on a self-discovery journey, retracing Susan’s steps, all while being shadowed by Nolan. Her day kicks off with breakfast extravagance at a local diner, where she embraces the jacket, inadvertently earning a ticket to be recognized as Susan. Unfortunately, their attempt at blending in is cut short when she and Dez are forcefully ousted. Mysteriously, Nolan manages to snag a postcard for the Magic Club, which Roberta carelessly drops, signaling the start of more trouble.
Upon reaching the famed club, Roberta narrowly misses Susan, who is being released from incarceration and struggling with the loss of her belongings. In a surprising turn, Roberta gets hired as a replacement for Crystal, even though her initial performance leaves much to be desired. This foray into the magical realm is abruptly challenged by an aggressive encounter with Nolan, who demands the earrings while making a hasty getaway from the law.
Just when her ordeal couldn't escalate further, Roberta's own memories begin to return sporadically as she suffers yet another head injury. Being wrongfully apprehended as a streetwalker only adds to her growing distress. Meanwhile, Roberta's husband Gary wallows in his own turmoil, which includes a clandestine affair that threatens to unravel their already fragile marriage.
As the events unfold, Gary gets pulled towards Susan's number, accidentally left behind at a vintage shop. This twist of fate serves as a precursor to a series of dramatic encounters leading him directly to Susan, where they share an enlightening evening of pleasure and reflection. The stage is set for an explosive confrontation between Gary and Roberta when she phones from her confinement, only to hang up in disgust when answered by her husband and Susan.
With stakes escalating, Roberta's desperation rises. A frantic call to Dez uncovers that his apartment has been ransacked by Nolan, amplifying their need to act. The decision to spend the night together feels monumental yet uncertain for Dez, who is still oblivious to Roberta's true identity.
The plot thickens as Susan, now enlightened by Roberta's diary, seeks to unearth the reality regarding her enigmatic twin. A televised segment about Meeker's death and Nolan's theft of the exquisite earrings—previously belonging to Nefertiti—stokes her resolve.
The climax looms at the Magic Club when Dez unexpectedly encounters an intruder in his apartment—none other than Jim. His revelations about his relationship with "Susan" provide an unexpected but fitting backdrop for Roberta's quiet exit, leaving her friends pondering the truth of her departure.
As the final act draws near, Roberta prepares for a confrontation that will unmask her long-lost identity. With Gary, Leslie, and Nolan present, the very essence of reality is on the brink of being shattered. In a moment of serendipity amidst the cinematic curtain's descent, Roberta finds herself in Dez's dimly lit space, where they share an electric kiss against the backdrop of the flickering projectors. Unknown to them, Jim and Susan watch the romance unfold on screen beneath, oblivious to the real-life drama just above. Meanwhile, across the city, Roberta and Susan relish their newfound status as heroes, with headlines declaring: "Earring Heist Foiled!"—their daring acts making them stars by morning's light.
