A thirty-something Dublin busker ("Guy", played by Glen Hansard) sings and plays guitar on Grafton Street, a Dublin shopping district. He struggles with the trials of performing on the street. Lured by his music, an unnamed young Czech immigrant flower seller ("Girl", played by Markéta Irglová) talks to him about his songs. Delighted to learn that he also repairs Hoovers (a brand name that became synonymous with vacuum cleaners in the United Kingdom and Ireland), she insists that he fix her broken vacuum cleaner.
Next day she comes back with her vacuum cleaner, and soon tells him that she is a musician, too. At a music store where she regularly plays piano, he teaches her one of his songs ("Falling Slowly"); they sing and play together. He invites her and her ailing vacuum back to his father's shop, and on the bus home musically answers her question as to what his songs are about: a long-time girlfriend who cheated on him, then left ("Broken Hearted Hoover Fixer Sucker Guy").
Once stars Glen Hansard and Markéta Irglová
At the shop, she meets his father (Bill Hodnett). The Guy takes the Girl up to his room, but when he asks her to stay the night, she is insulted and leaves. The next day, they quickly patch things up, as over the course of a week they excitedly write, rehearse and record songs. The Girl rehearses her lyrics for one of the Guy's songs (which she entitles "If You Want Me"), singing to herself while walking down the street, or when at a party, people perform impromptu (including "Gold").
Flirtation continues. He is thinking about and writing about ("Lies") his ex-girlfriend (Marcella Plunkett), who moved to London. The Girl encourages him to win her back. Invited home to dinner by the Girl, the Guy discovers that she has a toddler (Kate Haugh) and lives with her mother (Danuse Ktrestova). He decides that it is time to move to London, but he wants to record a demo of his songs to take with him and asks the Girl to record it with him. They secure a bank loan and reserve time at a recording studio.
He learns she is married, with a husband in the Czech Republic. When Guy asks if she still loves her husband, she answers in Czech, "Miluju tebe", but coyly declines to translate what she said. (Although the translation is not included in the movie, in the Czech language it means "It is you I love.") After recruiting a band among other buskers (Gerard Hendrick, Alaistair Foley, Hugh Walsh), they go into the studio to record. They quickly impress Eamon, the jaded studio engineer (Geoff Minogue) with their first song ("When Your Mind's Made Up"). On a break in the wee hours of the morning, the Girl finds a piano in an empty studio and plays the Guy one of her own compositions ("The Hill"). He asks her to come with him to London, which she jokingly goes along with before they come to terms with reality.
After the all-night session wraps up, they walk home. Before they part ways, the Girl reveals that she spoke to her husband and he is coming to live with her in Dublin. The Guy asks her to spend his last night in Dublin with him; she says that it would only result in "hanky-panky", which is a "bad idea", but after the Guy's pestering she ultimately agrees to come over. In the end, she stands him up and he cannot find her to say goodbye before his flight. He plays the demo for his father, who gives him money to help him get settled in London. Before leaving for the airport, the Guy buys the Girl a piano (a Petrof) and makes arrangements for its delivery, then calls his ex-girlfriend, who is happy about his imminent arrival. The Girl's husband (Senan Haugh) moves to Dublin and they reunite.