The main character of Whisper of the Heart is a 14-year old girl named Shizuku Tsukishima who is in junior high school in Tama New Town, on the outskirts of Tokyo. She loves reading and writing in her spare time, but her parents wish she would pay more attention to her schoolwork and her upcoming high-school entrance exams. However, her love of reading fairy tales and her work in putting new words to the song, "Take Me Home, Country Roads" consumes her time and energy.
One day Shizuku sees a chubby cat riding on the train with her. She follows the cat off the train and ends up at an unusual little curiosity shop. She meets the shop's owner, a kindly old man, who shows her to a unique grandfather clock which he is repairing. Only at 12 o'clock, a dwarf and an elf appear in the clock. The tales relates that the elven princess, who has been turned into a sheep, can only appear for a short time, at 12:00. The dwarf king, who is her love, appears to see her for that brief time each day. Shizuku also notices a small statue of a cat dressed in fine clothes, known as the Baron, who will eventually become the basis of the story Shizuku will write.
Later, she finds out that Sugimura, a classmate and old friend whom her best friend Yuko has a crush on, likes her. However, she says that they have to stay only friends.
Afterwards, outside the shop, Shizuku finds Seiji Amasawa, a boy from her school whose name she had first noticed on the cards of her library books: he had checked out many of the same books before she did. The shopkeeper is Seiji's grandfather. Seiji and Shizuku's first encounters are brief and uncomfortable, but eventually they grow close to one another. Shizuku learns that Seiji is working to become a luthier. Ashamed that she has no similar aspirations, Shizuku dedicates herself to writing, abandoning her studies and falls further behind at school, which causes conflict between her and her mother, father and older sister.
When Seiji leaves for Cremona, Italy, to begin a trial apprenticeship with an instrument-maker, Seiji's grandfather helps encourage Shizuku to complete her ambitious writing project. The movie's resolution comes as Shizuku finishes her story and decides to resume her schoolwork; Seiji later returns from his first stay in Italy after two months where he then proposes to Shizuku, who accepts joyfully. The credits sequence at the end of the movie shows several of Shizuku's classmates walking by, including Yuko, who stops and waits for Sugimura. They meet, talk for a little while, and then walk off together, presumably as a couple now that Yuko has confessed.