In the small but picturesque lake town of Cedar Cove, municipal judge Olivia Lockhart is a beautiful woman who is known to everyone in town for running a respectable courtroom. When Olivia rules to extend her decision on a divorce case involving a very young couple and the tragic loss of their newborn, the new editor-in-chief for the Cedar Cove Chronicle, handsome Jack Griffith, arrives to Olivia's judges' chamber to introduce himself and get the scoop. Jack is interested in Olivia, but she closes the door in his face, unable to talk about the case.
Alone in her office with her loving but nosy mother Charlotte, Olivia takes a phone call from Senator Pete Raymond, who explains a federal judge's position has opened up in Seattle and he'd like to nominate her. Jack waits outside the courtroom, desperate for a news story. Charlotte leaves and Jack corners her at her car, asking to do a personal story on Olivia for the paper. Charlotte, thinking he would be a perfect match for her daughter, agrees.
That night, Olivia gets ice cream with her daughter Justine, a recent college graduate. Justine works at a local coffee shop and hopes to sell homemade necklaces and make something of her college degree soon. She's dating an older man, Warren, who is a wealthy home developer and is eager to provide for her. Olivia doesn't quite approve of the relationship.
The next morning, the Cedar Cove Chronicle has a front-page story Jack wrote about Olivia and the divorce case. Olivia is annoyed and Cecilia, the young waitress and wife involved in Olivia's peculiar divorce case, is frustrated with the front page story as well, not wanting the whole town to know about her personal life. As she waits tables, her estranged husband, Ian, walks in. Since he is in the Navy, he'll be shipping out for six months and although they are divorcing, Ian still cares for Cecilia. The two still share a bond over the sudden death of their four-day-old daughter, Allison Marie.
Warren cooks Justine dinner and surprises her with a diamond engagement ring. Justine sweetly declines his proposal, insisting they hardly know each other yet; she wants to wait to get married. She hurries off to a high school reunion committee meeting, where she sees her old flame, Seth, for the first time since graduation. All her old feelings come rushing back as they catch up with each other, and she is left confused about her relationship with Warren.
The next day, Jack looks for a story at the community center, but instead he finds most of the town, including Olivia, watching the annual seagull-calling contest. As they joke around about the contest, they start to get to know each other. As they part ways, Jack asks Olivia to dinner sometime.
Before shipping out, Ian stops by Cecilia's apartment. Cecilia is still upset with Ian about Allison Marie's death, exactly one year ago. Ian was away on a submarine when Cecilia gave birth and Allison Marie died shortly after. When he returned, it seemed like he had no sympathy at all,but he was only trying to be strong for Cecilia. Now, Ian hugs Cecilia. Caught up in the emotions, they start to kiss, but Cecilia pushes Ian away.
Jack takes Olivia out to dinner, trying to get to know her. They seem to have a good time, but when Jack drops her off home later, he looks distracted and nervous. He gives her a small kiss before hurrying away, explaining he has to go to the office. Olivia is curious about his sudden change in attitude, but invites him to come see a play with her the next day. He agrees, but then stands her up, making her furious.
Meanwhile, Justine and Seth start reconnecting and spending time together, despite Warren's proposal and his renewed effort to win over Olivia. Alone on Seth's boat, Seth kisses Justine. When she pushes him away, he criticizes her for her relationship, saying she is only after Warren's money. She judges him for having no direction in life and remaining the immature jock she dumped in high school. Angry, she storms off the boat. Later, when Warren returns from a business trip, she finally accepts his marriage proposal.
That night at the restaurant, as Cecilia counts her tips, the local news reports a Navy submarine explosion with Ian on board. Later, she gets a call informing her Ian is injured, but stable. Cecilia is relieved he's alive and visits him at the hospital. She brings him home and takes care of him, suddenly realizing after almost losing him forever, she wants him back.
Olivia travels to Seattle where she has an interview with Senator Raymond for the federal judge position. Although the two are old acquaintances, Raymond is gravely serious when he pulls out a copy of the Chronicle with Jack's front-page story about Olivia's divorce case. He wants her for the judgeship, but he worries about these controversial rulings and stories. Olivia defends her decision in the case, but agrees to stay out of the papers. She gets the job.
Hanging around the sheriff's office, Jack notices some surveillance photos of Warren spread out on a desk. He goes to Olivia's home, which is now up for sale, to show her the photos. Things are still tense between them, but Jack apologizes for standing her up and finally explains. He is a recovering alcoholic and worries it will be a problem for their relationship. Olivia tells her own story; Justine's twin brother died when he was 13 and it broke up Olivia's marriage. Jack now understands why she didn't grant Cecilia and Ian the divorce they wanted. Olivia doesn't want to talk about it and pushes Jack away. Now that she's moving to Seattle, she doesn't want to start a relationship.
Warren explodes in anger when he finds out Justine was spending time with Seth. She runs out of his house in tears, going to her mom's. Seeing how upset her daughter is, Olivia takes the surveillance photos to Warren's house and confronts him about the images, which show him with another woman on one of his business trips. She threatens to tell Justine about the pictures if he doesn't break off the engagement himself.
Cecilia and Ian visit Olivia's courthouse to call off their petition to divorce. They've realized they want to make the marriage work. That night, Olivia heads down to the dock, where everyone in the town surprises her with a going away party. Olivia is touched as she mingles with all the people who mean so much to her. Jack even gives her a story he's written about her farewell.
As Olivia reads Jack's article, she realizes how much Cedar Cove means to her, and decides she doesn't want to leave. She visits Jack at his office and hands him the story, telling him not to print it, and asks if they can try a relationship again. He gladly agrees. Later, happy to be home, Olivia presides over an official wedding ceremony by the water for Cecilia and Ian.