‘Yeh Jawaani Hai Deewani’ is a story of the exhilarating and terrifying journey of four characters as they navigate through their youth; from their carefree laughter as they set off on a holiday together in their college days, until their bittersweet tears as they watch the first of their bunch get married. It focuses on the relationship between two characters, Bunny (Ranbir Kapoor) & Naina (Deepika Padukone). Naina Talwar is a shy and nerdy medical student. She studies constantly and always tops her classes, but she feels like an outcast due to her introvert nature. An encounter with an old classmate, Aditi Joshi (Kalki Koechlin), makes her realize that she wants more from life than high marks. Thus, she makes an impulsive decision to follow Aditi on a hiking trip into the Himalayas, up to Manali. During the hike, she renews her friendship with other former classmates, Kabir "Bunny" Thapar and Avinash "Avi" Yog (Aditya Roy Kapur).

Bunny is a handsome charmer whose dream is to wander and discover the world. He does not plan to marry or settle down. He lives with his supporting father whom he loves very much, and his step-mother. During their trip, seeing Aditi's silent reactions to Avi's constant flirting with other girls, Bunny and Naina realize that she has a secret crush on Avi, but do not bring the matter to surface.In the course of the mountain trek, Bunny and Naina come closer to each other. Bunny teaches Naina to laugh, to play, and more importantly, to love. At the end of the trip, she is close to telling Bunny how she feels but is interrupted by Avi. He accidentally finds a letter accepting Bunny to graduate school in journalism, at Northwestern University in Chicago. Bunny explains that the trip is his last hometown adventure before he leaves. He is sad to leave his friends but happy to start a career that will lead to travelling, which he dreams of, and thus wanted to bring them along to Manali to give them a surprise. Naina realises that love and marriage have no part in Bunny's plans and remains silent about her feelings but is happy for him as he is following his passion. 

Eight years pass by and Naina finishes medical school and now works in a clinic while Bunny works as a videographer for a travel show on Fox Network and travels the world, as he had planned. It is shown that Bunny's father has passed away and due to his job in remote areas, he was not able to attend his last rites. Naina has moved ahead in life and is not waiting to meet Bunny, but they meet in Udaipur, for Aditi's lavish wedding to Taran (Kunaal Roy Kapur), an awkward but sweet engineer, who is rich as Avi and Bunny claim. At the wedding, Bunny and Avi renew their lost friendship. Naina and Bunny are strongly attracted to each other again. Both resist love – Bunny, because he is not able to figure out that he is in love with Naina and Naina, as she doesn't want to get her heart broken again.

A day before the wedding, Bunny sees Naina with another man, Vikram (Rana Daggubati), who is the wedding photographer. He is Naina's friend, but Bunny assumes him to be her boyfriend, feels jealous and argues with him, finally sending him away. Bunny and Naina meet, argue, and reveal their feelings by a kiss. Yet neither of them is willing to give up a career to follow the other. It seems that their romance is over. Bunny also confronts Aditi on her past crush on Avi. She admits that she had feelings for Avi but says that she has gotten over him and is extremely happy with Taran. Bunny leaves for home on the night of Aditi's wedding and will leave for Paris three weeks later for his dream job as a travel show host.

On New Year's Eve, as Naina sits alone at home along with her dog, someone knocks on her door and it's Bunny. He surprises her with a kiss. He has turned down his dream job to be with Naina and proposes to her, but Naina fears that he might regret his decision in the future. However, Bunny says that he is happy with Naina and wants to continue travelling but with her. He argues that somehow they can make a life together. Naina agrees. Bunny and Naina then get engaged and finally declare their love properly for one another. They have a conference call between Aditi and Avi. Avi is at his bar and Aditi is at the airport as a newlywed leaving for her honeymoon with Taran. The friends find out about Bunny and Naina and are overwhelmed. Aditi states that she always kind of knew about the sparks between them. They all wish each other a Happy New Year and the film ends with Bunny and Naina smiling and embracing each other.