Meera (Diana Penty) is a shy and simple traditional girl who leaves her family in India to live in London with her new husband Kunal (Randeep Hooda). While at the London airport, she meets the shameless flirt Gautam "gutlu" (Saif Ali Khan), who hits on her and asks her out. Meera politely tells him that she is married and then leaves. Meera searches for her husband and finally finds him, but he is angry to see her and explains that he only married Meera for her money, telling her to stay away from him. This leaves Meera heartbroken and stranded in London with no place to stay.

While in the bathroom at a department store, Meera meets party girl Veronica (Deepika Padukone) who sees Meera weeping and decides to help her. Veronica takes Meera to her apartment and explains that her estranged father sends her a large amount through cheque every month, which helps Veronica enjoy the life of a rich socialite. One night, Veronica takes Meera to a nightclub, where they run into Gautam. At the club, Gautam and Veronica dance intimately and make out. The next morning, after an interview, Meera comes home to find Gautam on the couch. She learns that Gautam and Veronica slept together the previous night.

Soon, Gautam moves in with Veronica and Meera, continuing his "no strings attached" relationship with Veronica. Although Meera initially dislikes him, she eventually accepts him, and the three become best friends. Things get complicated when Gautam's mother (Dimple Kapadia) shows up, wanting to know if Gautam has found the girl he wants to marry. He lies to his mother and says that he is in a relationship with Meera because she is the "ideal Indian girl" who would meet his mother's approval. During this charade, Gautam and Meera end up falling in love. However, Meera is hesitant to admit it, because she does not want to hurt Veronica, who has fallen in love with Gautam and is trying to win the approval of his mother by becoming a proper Indian girl. Gautam sits the two girls down and explains to Veronica that even though she loves him, he is in love with Meera. Meera apologises to Veronica, but Veronica assures her that it is okay and insists that they all go to the club to celebrate.

However, at the club, a drunken Veronica breaks down, telling Gautam that she will do whatever he wants, and she tells Meera that no one has ever used her the way Meera did. The next morning, the three part ways. One night, Veronica is injured after being hit by a car. Gautam rushes her to hospital. Meera comes there with Kunal to make it look like she has gotten over Gautam.

Gautam moves back in with Veronica to care for her. Veronica realises that Gautam is no longer the flirtatious, fun-loving man with whom she fell in love and that he is that man only when he is with Meera. She sacrifices her love for Gautam realising she is not perfect for him, and she helps him locate Meera. They seek out Kunal, who tells them that Meera left him because she loved Gautam too much and that she has gone back to India. Gautam and Veronica travel to Delhi. Gautam proposes to Meera, and she accepts. Veronica and Meera became best friends again.

Farhan Qureshi (R. Madhavan) narrates the story of himself and his friends, Raju Rastogi (Sharman Joshi), and Ranchoddas "Rancho" Shamaldas Chanchad (Aamir Khan), students at the Imperial College of Engineering, one of the best colleges in India. Farhan wants to become a wildlife photographer, but is pursuing an engineering degree to fulfill his father's wish, whereas Raju needs to improve his family's financial situation, and Rancho studies for the pleasure of building machines. Rancho incurs the wrath of college's dean, Professor Viru Sahastrabuddhe a.k.a. 'Virus' (Boman Irani), by giving creative and unorthodox answers in class and living by the philosophy that one should pursue excellence not success as success will happen if excellence is achieved, and later blames the rote-learning mentality of the institution for the suicide of fellow student Joy Lobo. Virus's model student is Chatur Ramalingam, called "Silencer" for his silent but malodorous farts, (Omi Vaidya), whom Rancho humiliates by replacing praise with an obscenity in the speech memorized by Chatur for delivery before the college faculty and donors. Meanwhile, Rancho falls in love with Pia, in reply, tells Rancho of the exam, and he and Farhan steal the examination's questions for Raju who refuses to cheat as he has fully embraced Rancho view on life. Virus sentences them to expulsion; but then Pia angrily tells him he was possible for the death of their brother who had wanted to pursue literature and become a writer however under Virus is insistence he failed the ICE exam three times and committed suicide due to the pressure placed on him by his father who had considered his death an accident. The three then earn a reprieve when Viru's pregnant elder daughter Mona (Mona Singh) goes into labour at the same time. A heavy storm cuts electricity, and Pia who had left the house instructs Rancho to deliver the baby in the college common room via Voice over IP, after Rancho restores power using car batteries and a power inverter invented by Rancho. After the baby is apparently stillborn, Rancho resuscitates it by using his signature quote All is Well to which the baby responds and survives; therefore Virus allows them to take and pass their final exams. Rancho comes first and is awarded Virus's prize pen, retained hitherto for an especially-capable student.

Raju and Farhan then take Pia who was on the verge of marrying Suhas to Ladakh, where they see inventions resembling those of their friend. They reunite with him and when they ask him his real name, he identifies himself as Phunsukh Wangdu, Chatur's prospective business partner. Upon learning this, Chatur is horrified and begs Phunsukh to establish the business relationship as he had forced him to sign a declaration of defeat and attempted to humiliate him, apparently to no effect.