Richard (Leonardo DiCaprio), a young American backpacking in Thailand, goes to Southeast Asia with the intention of experiencing something radically different from his familiar life. He meets Daffy (Robert Carlyle), who is crazy and rants on about a beach paradise on a secret island, and the parasites of civilization. Daffy later commits suicide but leaves Richard a map to the island, convincing him that it exists.
Richard meets Françoise (Virginie Ledoyen) and her boyfriend, Étienne (Guillaume Canet), and convinces them to accompany him to the island, partly out of an infatuation for Françoise. They travel from Bangkok to the shores of Koh Phangan in the Gulf of Thailand, where Richard befriends a pair of American surfers. They talk excitedly about the myth of the beach and how it has an almost unlimited supply of marijuana. Richard does not admit his knowledge, but copies his map and slides it under their door the next morning.
To finally reach the island, Richard, Françoise and Étienne must swim across to it. When they first arrive on the island, they come across an enormous marijuanaplantation guarded by local farmers armed with AK-47 assault rifles. They barely manage to evade detection. After jumping off a high cliff and landing in a lake below, they are seen by Keaty (Paterson Joseph), who takes them to the beach community.
They are cautiously interrogated by the island's leader Sal (Tilda Swinton) regarding their knowledge of the island, but are accepted. The trio are introduced to everybody and over the next few days, go on to become integrated into the community.