20-year-old Sophie Sheridan (Amanda Seyfried) lives with her mother Donna (Meryl Streep) on the small Greek island Kalokairi where Donna runs a hotel called Villa Donna. Sophie is planning to marry her fiance Sky (Dominic Cooper)and wants her father to be present to "give her away," but does not know who he is. After reading Donna's diary from 20 years ago, she concludes he is one of three men: Sam Carmichael (Pierce Brosnan), Harry Bright (Colin Firth), or Bill Anderson (Stellan Skarsgård). Without telling her mother and fiancé, Sophie mails invitations to all three ("I Have a Dream"), and hopes to find out which is her father. Sophie tells her two best friends, Ali (Ashley Lilley) and Lisa (Rachel McDowall) about her potential fathers ("Honey, Honey"). All three men come to the island, thinking Donna asked them to come, and Sophie hides them upstairs in the old goat house,getting them to agree not to reveal she wrote to them pretending to be her mother Donna. Other guests have also arrived from the harbor:Donna's longtime friends, single,fun-loving writer Rosie (Julie Walters) and rich three-time divorcée Tanya (Christine Baranski).
While Donna is making repairs to the hotel she cannot afford (Money, Money, Money), there is a tremor and the dolphin mosaic in the courtyard floor splits. Donna hunts flooring supplies in the goat house, hears noises upstairs, and peers inside the trap door and window. Recognizing the men she had dated,Donna panics,but tries to take another peek at them(Mamma Mia), but cannot get inside the locked room. Finally, she climbs to the rooftop, and then falls through the top door(opened by a member of the Greek chorus whom Donna and the other characters apparently cannot see). Donna, unable to handle the memories, asks the three men to leave the island, so they simply stay in the harbor on Bill's boat. Seeing the three men has sent Donna into shock, her two friends, Tanya and Rosie, try to reassure her (Chiquitita). Donna explains the 3 potential fathers are on the island, and comments, "it's like a hideous trick of fate," when some bystanders instantly laughed. Tanya and Rosie ponder the quiet bystanders, and Rosie mutters, "It's very Greek" Tanya and Rosie look at the Greeks then follow Donna into the house (Greek comedy).
However, Donna's depression continues, so Tanya and Rosie remind her of her free-spirited past (Dancing Queen) and Donna rebounds; they all sing together and dance through the streets, joined by many women and girls of the town, dancing down to the harbor pier(former ABBA member Benny Andersson appears playing the piano in this scene). Sophie visits the three men on Bill's boat and convinces them to stay for her wedding after hearing all three men's memories of Donna (Our Last Summer). When she hears Sky, she jumps into the sea and swims to him on the beach. There, they discuss their meeting and their love for each other (Lay All Your Love On Me), but Sky is ambushed by his buddies for the bachelor party.
That evening, the three women, at a hen party, recreate their old 80's style musical duo, Donna and the Dynamos (Super Trouper) to entertain at the bachelorette guests. The three men come to the party, and the crowd separates, singing and dancing (Gimme! Gimme! Gimme!). Sophie talks to Bill, and he realizes he could be her father. She asks him to give her away at the wedding. The masked guys from Sky's bachelor party invade the hen party in a wild dance (Voulez-Vous). In the commotion, the other two men also conclude that they could be the father, and separately, each tells Sophie that he will be the one to give her away at the wedding. Surrounded by her mother, her fiancé, and all three potential fathers, Sophie faints over her dilemma.
To avoid contention between the three men, Sophie instead asks Donna to give her away. Harry, feeling responsible for missing 20 years of Sophie's life, insists that Donna accept a very large monetary gift to cover the "cost of the wedding" (and more). While talking to Sam, Donna, making more repairs, attempts to seal the cracks in the central-courtyard dolphin mosaic, but the caulking nozzle splits, further thwarting her efforts of the day. Donna must rush to other preparations. Sam and Donna have tried to talk to each other, but each have concealed their feelings, love, and each laments their love separately (SOS). Meanwhile, Tanya rejects the playful advances of Pepper and some of Sky's other friends (Does Your Mother Know).
After confessing to Sky that she has invited all three potential fathers, Sky says that he is unsure of what he wants to do about the wedding. Sophie rushes up to Donna and asks her if she will help her prepare for the wedding and she agrees; whilst preparing, they both reminisce about the times before being engaged (Slipping Through My Fingers). Donna, still unaware of Sam's true feelings, and rushing to the hilltop wedding, tells Sam to stop talking to her(The Winner Takes It All). Then Donna runs to the hilltop. Sam is stunned.
During the wedding ceremony, Donna finally mentions the "father" issue, and the secrets begin unraveling: all three potential fathers publicly claim be Sophie's father and agree to happily take a 'third' each. Sophie and Sky decide to postpone the wedding,as Sky wanted all along,and to take a trip around the world together. Sam proposes to Donna, revealing that after falling for her two decades previously, he had to go back to England to break off his engagement. But when he came back to Kalokairi,one of her friends told her she was off with another man(Bill). He went home and got married anyway. But that was a mistake and he is now divorced. He argues that if they marry right away,the wedding party is not wasted. Donna agrees to marry Sam (I Do, I Do, I Do, I Do, I Do). Sam and Donna celebrate with their newfound family and friends (When All Is Said and Done). At the wedding, Harry tells Donna she was the first and last woman he ever loved, infering he is gay and pointedly looks at a local lad.
During the after-wedding party, Rosie reveals she is strongly attracted to Bill (Take a Chance on Me) he does not reciprocate at first, but eventually gives in. One issue remains to be resolved: as the crowd dances in the courtyard, the central dolphin mosaic breaks open, in a tremor, and a tall spray rains over the party.
Donna concludes it was Aphrodite,the Greek goddess of love,influencing events all along. The closing scene of the film shows Sophie and Sky sailing to the horizon to begin their life together, leaving Sam and Donna to live happily ever after on the island ("I Have a Dream").
After the closing scene, Donna and the Dynamos perform "Dancing Queen" over the credits. Next, the entire cast sings Waterloo. Finally, Sophie sings Thank You for the Music as the ending credits roll