Journalist Martin Sixsmith has lost his job as a Labour government adviser, and is contemplating writing a book on Russian history. He is approached at a party by the daughter of Philomena Lee. She suggests that he write a story about her mother, who was forced to give up her baby boy, Anthony, fifty years ago. Although he initially scorns the idea of writing a human interest story, he eventually meets with Philomena and after hearing her shocking story, he decides to investigate further.

After a tryst with a young man at a fair in 1951, Philomena became pregnant and was sent by her father to Sean Ross Abbey in Roscrea in Ireland. After giving birth, she was forced to work in their laundry for four years to pay off the cost of her stay. One day she discovered that the nuns had given her son to a couple for adoption, without warning or a chance for Philomena to say goodbye. Philomena kept her lost son a secret from her family for fifty years, but she visited the convent periodically to try and find him. The nuns repeatedly told her that they were unable to help her.

Martin and Philomena begin their search by trying one more time at the convent. The nuns are once again polite but unhelpful, and claim that the adoption records were lost in a fire years earlier. Later at a pub, the locals tell Martin that the convent deliberately destroyed the records in a bonfire, and that most of the children were sold for £1000 each to rich Americans.

Martin's enquiries reach a dead end in Ireland, and he invites Philomena to accompany him on a trip to the US to search for Anthony. His contacts there help him discover that Anthony was adopted by Doc and Marge Hess, who had renamed him Michael. He grew up to be a lawyer and senior official in the Reagan and George H. W. Bush administrations. They also learn that he had died eight years earlier.

Although distraught, Philomena decides that she wants to meet people who knew Michael. They visit a former colleague and discover that Michael was gay and died of AIDS. They also visit his sister Mary, who was adopted at the same time from the convent, and learn about his lover Pete Olssen. After repeatedly avoiding Martin's attempts to contact him, Pete finally agrees to talk to Philomena when she turns up at his door. He shows Philomena some videos of his life with Michael. To Martin and Philomena's surprise, they see footage of Michael, dated shortly before he died, at the convent in Ireland, and Pete explains that Michael had always wondered about his birth mother, and had travelled to Ireland in his final months to try and find out about her. Martin and Philomena are shocked to learn that the nuns had told him that his mother had abandoned him and that they had lost contact with her. They are also surprised to learn that Pete had defied his family's wishes and had Michael buried in the convent's graveyard.

The story ends where it begins: at the convent. Against Philomena's pleas, Martin angrily storms into the quarters and confronts a nun, Sister Hildegard, who had been present when Philomena's son had tried to find her. Sister Hildegard is unrepentant, saying that losing her son was Philomena's penance for the sin of fornication. Martin tells Hildegard that she should apologize, but is astonished when Philomena instead chooses to forgive the nun of her own volition. Philomena then asks to see her son's grave. Martin tells her he has chosen not to publish the story, but Philomena tells him to go ahead because "people should know what happened here."