America, the 1940s
A farmhouse on a Puget Sound island. An American veteran, Jim Crowley, and Eva, his new wife, have come to buy a home. A German Jew, Eva desperately wants her parents to leave Germany, where their lives are in danger. She hopes her family will find peace and sanctuary in this place so far from the war. Meanwhile, inside the home, a Japanese American family has heard that the FBI has been searching homes and arresting people of Japanese descent. The family burns their precious Japanese belongings, attempting to erase all ties to Japan in the hopes that they will avoid arrest.
Eva waits outside as Jim, knowing he has the upper hand, tries to get Makoto Kobayashi to sell the land for a fraction of what it is worth. The FBI arrives at the home and tells Makoto he is under arrest; the FBI found some old dynamite in the shed out back, and they say this contraband makes him a threat. Makoto decides, under the pressure of the situation, to sell the land to Jim. As the FBI agents take Makoto away, he and his teenage daughter, Setsuko, promise to meet at the farmhouse, the only home they know, after the war.
Setsuko and her mother, Hiroko, have packed up the house. Setsuko holds her suitcase, ready to leave, when a postman delivers a letter. Setsuko sees that it is from Germany, for a woman named Eva. Angry that she is being forced to leave her home, the girl steals the letter.
A few weeks later
Jim and Eva move into their new home; they designate a room for Eva's parents. Jim tries to keep Eva's hopes up. Eva notices that small items have been left behind in the home: a piece of a record and a photograph. When she finds a beautiful Hina-Matsuri doll hidden beneath a floorboard, Eva asks Jim about the previous owners. Jim tells her that they were "Japs," sent to the internment camps. He tells her to throw away the doll, that it doesn't belong in a room for her parents. Eva defies Jim's wishes and hides the doll, promising to find its owner and return it at war's end.
Jim and Eva hear an announcement on the radio of Germany's surrender. Eva, who has learned about the Kobayashi family and their whereabouts, writes to Setsuko, telling Setsuko she has something that belongs to her.
Later that month
While still incarcerated, Setsuko receives the letter. When her mother, who is gravely ill, inquires about the letter, Setsuko lies and explains that the letter is from her father, telling them to keep hope because the war is nearly done.
Puget Sound Farmhouse. When a letter comes back to Eva from Setsuko, Jim intercepts it and tells Eva that Setsuko is not allowed in their home. President Truman announces the dropping of the atomic bomb.
There is a knock on the door. It is Setsuko, returning to the home. Setsuko confronts Jim, reminding him that he coerced her family to sell their home for next to nothing. Eva asks Jim if this is true.
Jim tries to explain his actions to Eva, but she can't accept what he has done. She leaves the room to retrieve the doll she has promised to return to Setsuko. While she is gone, Jim confronts Setsuko, and Setsuko admits to another reason for coming. She is here to return Eva's letter. Eva returns to the room, and Setsuko gives her the letter. From the stolen letter, Eva learns of her parents' fate, and she collapses. Setsuko must finish reading the letter for her. Jim tries to comfort Eva. Setsuko's father arrives at the front door.