Stewart (Gabriel Byrne) and Claire (Laura Linney) live in the Australian town of Jindabyne with their young son Tom (Sean Rees-Wemyss). An unspoken tension lies beneath the surface of their relationship; their marriage is still recovering from Claire suffering a traumatic postpartum nervous breakdown following the birth of their son several years ago. Stewart's mother, who stepped in to help raise her grandson for the first eighteen months of his life following Claire's breakdown, has not yet let go of her need to control Claire's family. Both Stewart and his mother handle Claire as though she is a shattered vase glued back together, and might fall apart again at any moment. Claire, as the film opens, learns she is pregnant again, which terrifies her, but she keeps the pregnancy a secret from Stewart until she can decide what to do.

Claire's best friend, Jude (Deborra-lee Furness) and her husband Carl (John Howard) are raising their granddaughter (and Tom's best friend) Caylin-Calandria (Eva Lazarro), who, in the wake of her mother's death, has developed an unhealthy obsession for dead things and rituals, into which she continually draws Tom. The children's schoolteacher, Carmel, who is of native Australian descent, is dating Stewart and Carl's friend Rocco. The fourth couple, Billy (Simon Stone) and his young wife Elissa (Alice Garner), who have a baby, are young and still in that blissful state of new love that makes their older friends roll their eyes with the wisdom of experience.