In 1996, Brock Lovett (Bill Paxton) and his team of "Treasure Hunters/Grave Robbers" come to the shipwreck of the Titanic, searching for the priceless diamond known as "The Heart of the Ocean. Lovett and his team send a robot submersible into the wreck. The robot goes into a tattered bedroom. Lewis Bodine (Lewis Abernathy), a co-worker and friend of Lovett, uses the mechanical arms of the sub to move over furniture to find a safe, their prize.

They come back onto the surface to a boat where the rest of the crew is celebrating the find of the safe. Brock feels around inside the safe for what he is looking for. He finds paper and a sketchbook, nothing else. Back inside of the boat, Lovett's team is analyzing the papers that were found inside the sketchbook. One in particular is a nude portrait of a woman lying on a couch wearing a necklace. Brock realizes that the necklace is the Heart of the Ocean. He checks the date, April 14, 1912 (signed JD), the day of the Titanic's sinking. He realizes whoever the woman in the picture is must know where the diamond is, but unfortunately has no idea who she is or whether or not she's dead or alive.

Meanwhile, in her quiet home, Rose Calvert (Gloria Stuart) is making pottery as her granddaughter Lizzie (Suzy Amis) casually goes about the house, feeding the dogs. The T.V. is heard in the background. It is on the news station and what catches Rose's attention at first is a line said by someone mentioning the Titanic. It shows Brock Lovett as he discusses what he is doing. Rose gets up and listens in. Brock speaks of the care his experts on the ship are taking with what they found in the wreck. They show the picture of the woman and Rose stares in amazement, nearly speechless. Back on the ship, Lovett is helping to launch the submarine into the water once again when he is interrupted by his comrade, Bobby Buell (Nicholas Cascone). Bobby claims that there is a call waiting for him that he will want to take. Brock reluctantly gets on the phone and speaks to the elderly Rose. The first thing Rose has to say is "I was just wondering if you had found The Heart of the Ocean yet, Mr. Lovett?" and he is hooked instantly. He asks whether or not Rose knows who the woman in the picture is and Rose certainly does; she tells him it is her.

The next thing seen is Rose and Lizzie being shipped by a helicopter over to Lovett's boat. Onboard, Brock is being briefed by Lewis on Rose's background. He believes Rose is nothing but a fake, seeking publicity. He describes how the woman Rose claims to be, Rose Dewitt Bukater, died on the Titanic when she was 17, according to records. He has done a background check on the old woman all the way back to the 1920's when she had worked as an actress. Back then her name had been Rose Dawson, not Dewitt Bukater. She later married a man named Calvert and they moved to Cedar Rapids, where they had kids. Still, Brock believes Rose may be who she says. Rose and Lizzie are then seen coming out of the helicopter with their luggage. Rose and Lizzie get set up in their quarters, arranging Rose's pictures beside the bed. Brock asks Rose if she needs anything and her only desire is to see her drawing. Rose goes into the room where everything recovered from the wreck is and sees the portrait in a tank of clear water and closes her eyes, remembering the day it was sketched. We see the hands of a youthful man sketching the drawing for the first time. We then see his blue eyes look up, wisps of blonde hair in his vision... Rose opens her eyes and comes back to reality.

Lovett goes on explaining the origin of the diamond to Rose, describing its color and the famous rulers who wore it. Rose says it was dreadful and heavy. Brock has tracked down the insurance records. He said a man named Caledon Hockley bought this for his fiancé, Rose Dewitt Bukater--her. He believes the diamond went down with the ship. Lovett then shows Rose some of the things recovered from what had once been her stateroom on the Titanic. She sees a silver mirror and a hair clip with a dragonfly on it that she eyes particularly. Brock asks if she's ready to go back to Titanic. Lewis is showing Rose a computer simulation of the Titanic's sinking, describing it as something you would want to be on very badly. Rose remembers the experience as more horrific and Lovett asks if she'll share the experience with them.

Rose stands and sees pictures of two double doors from the wreck, it's ornate wrought-iron window design still intact. She suddenly remembers a time when two men stood there, happy to greet her inside. She begins crying a bit and, thinking she is traumatized by these images, Lizzie suggests that she rest for a while. Rose refuses, and says its been eighty-four long years...but remembers the new ship so well. She begins telling her story: The year is 1912 and the Titanic is seen docked at Southampton, England, roughly ten minutes before its maiden voyage. The world is lively and amazed at the sight of the huge ship. A carriage man opens a door of one car and helps out a woman: seventeen year old Rose Dewitt Bukater (Kate Winslet). Rose remarks on how she doesn't think its size is much bigger than the Mauretania and is not as impressed by it as much as her fiancé, Caledon Hockley (Billy Zane). Cal tells Rose that Titanic is far too amazing to insult and tells Rose's mother, Ruth Dewitt Bukater (Frances Fisher), that Rose is much too hard to impress. Cal then goes on to explain how God himself could not sink the ship when Ruth states how the Titanic is proclaimed unsinkable. Cal then puts his manservant, Spicer Lovejoy (David Warner) in charge of his possessions as he, Ruth, and Rose board the Titanic. The older Rose is heard saying it was the "Ship of Dreams" to everyone else, but she desperately didn't want to board and go back to America. She was a well brought up girl on the outside, but was screaming inside.

Inside a nearby bar a group of four young men are playing poker. Two of them argue for a moment in different languages. Opposite them are an Italian with a strong accent, Fabrizio de Rozzi (Danny Nucci), and his American friend, Jack Dawson (Leonardo DiCaprio). The two of them are apparently dirt poor. One of the opposite men named Olaf (Bjorn Olsen) yells at his companion, Sven (Dan Pettersson) for betting their third class tickets for the Titanic. Jack states how somebody's life's about to change as they each reveal their cards. Jack has a full house, winning. He and Fabrizio dance around with the tickets, then Jack piles the money and the tickets into a bag. Olaf grabs Jack by the collar and is about to punch him, but instead hits Sven for betting the tickets. Jack begins laughing merrily. They are exhilarated by the fact that they are going to America, but then the bartender tells them that they aren't going to America--Titanic will leave without them in five minutes. Jack and Fabrizio then rush to the ship. They join the other Titanic passengers who are waving goodbye from the stern even though they know noone there. The ship's propellers start up as the ship sails off guided by a few small tugboats. Rose is in her stateroom, marveling at some paintings she purchased as she prepares to put them on the wall. Cal does not like them. Their maid, Trudy Bolt (Amy Gaipa) asks who the artist is, and Rose responds, "something Picasso." Cal thinks the paintings are worthless.

When the ship stops in Cherbourg, France, Margaret "Molly" Brown (Kathy Bates) boards. Her wealth comes from her husband finding gold and Ruth calls her "new money." After stopping in Ireland the next day, the ship plows west surrounded by the open ocean. Captain Smith (Bernard Hill) tells First Officer William Murdoch (Ewan Stewart) to "take her to sea." The stokers in the engine room, covered in soot and sweat, shovel the coal into the massive boilers. Jack and Fabrizio go to the very bow of the ship and look down at the water as the ship plows ahead. The two spot dolphins jumping out of the water merrily as the ship's workers work away down below to keep the ship going. The captain is happy, the crew is happy, and everything is going just splendid. Jack stands up on the bars of the bow at shouts "I'M THE KING OF THE WORLD!" He howls to the wind and puts his head back, closes his eyes, and spreads his arms out for balance. The ship is then viewed on a grand scale. From the bow to the hull to the stern it is seen, its incredibly huge size obvious. It seems incredible that man could have given birth to such a creation.

Rose is sitting at lunch with her mother, Cal, and Molly along with Thomas Andrews (Victor Garber), the architect of the ship, and Bruce Ismay (Jonathan Hyde), one of the men who created of the Titanic. Ismay and Andrews discuss the ship's design and how resistant she is to sinking. Rose looks bored and frustrated. Molly asks, "Who thought of the name Titanic?" Ismay says that he did, and he elaborates on how he wanted the name to convey size. Rose patronizingly asks Ismay if he knows of Dr. Freud, because his ideas on the male preoccupation with size might be of a particular interest to him. Most of them chuckle, but Ruth ridicules her.

Back on the aft stern deck, Jack is sitting down next to Fabrizio. Jack looks at a rather old man with a very young girl about six years old. Jack sketches them in a thin, long, brown sketch pad. He has exceptional artistic skills. Next to him, Fabrizio and a young Irish man are talking about who built the ship. The Irishman introduces himself to Jack and Fabrizio as Tommy Ryan (Jason Barry). Jack's attention is suddenly directed toward Rose, who has stepped out of the first class cafe and is looking out at the water. Tommy tells him to forget her. Jack just continues to stare. Suddenly, Rose glances down at Jack, but then away. Then she does it again, but leaves after Cal steps outside to retrieve her. That night, Rose is at dinner with the entire first class passengers. Everyone is chatty and lively but Rose looks very sad and dazed, ignoring everyone. Rose looks down in a trance-like state as everyone else ignores her sadness.

After dinner, Rose, feeling trapped, runs very fast along the promenade deck of the ship. She runs as fast as she can to the stern of the ship, not even noticing the only person there, Jack, who is lying on a bench, smoking and looking up at the stars. At the back railing, she pauses and looks over at the stern, where the ship's name TITANIC appears. Rose climbs over the railing and, perched on the outside of the railing, appears ready to jump. As she looks down, Jack approaches her. He tells her not to jump, but Rose tells him to stay back and she'll let go if he comes closer. Jack says he can't leave because he is now involved and if she jumps, he has to go in after her and he begins taking off his jacket. Rose tells him that's ridiculous and that the fall alone would kill him. Jack says he knows it would hurt, but he is much more concerned about the temperature of the water as he removes his shoes. Rose reluctantly asks how cold it is and he said probably just over freezing. He asks if she's ever been to Wisconsin, and Rose is genuinely surprised at the casual conversation. Jack goes on to say that he grew up there and once fell through some thin ice. The water was so cold he couldn't breathe or think about anything but the pain. Rose is a little haunted by the story, and Jack says that's exactly why isn't looking forward to jumping in there after her. He tells her he hopes she will climb back over so that he'll be let off the hook. He tells her to give him her hand again, and she does. She turns and faces him and Jack breathes a sigh of relief. They introduce themselves to each other.

Jack begins to help her over. As she begins to climb over, she slips and falls. Only Jack's firm grip on her wrist keeps her from falling into the Ocean. She screams as Jack struggles to pull her up. She continues to cry for help and a couple of crewmen hear her and come running. She pulls herself up, and at last she is back up on the railing and Jack has his arms around her tightly, coaxing her that he has her and he falls back on top of her as he returns her safely to the ship. The crewmen arrive suddenly, and seeing Rose in shock with her dress torn halfway to her thigh and Jack on top of her gives them the impression that he has tried to make an advance or worse.

Jack is arrested. Cal walks over to him and begins yelling at him, but Rose then tells Cal it was an accident. She makes up a story that she was leaning over to see the propellers and slipped. The master-at-arms asks Jack if that is true and he says yes after Rose gives him a pleading look. One of the men who was with them calls Jack a hero and then Cal asks Jack to join them for dinner tomorrow night, to which Jack agrees. As Cal, Rose and the other men start to leave, Jack asks Lovejoy for some cigarettes. They are alone when Lovejoy marks how interesting it is that Rose slipped so suddenly but he still had a chance to take his jacket and shoes off. Rose is alone in her cabin when Cal walks in. He tells Rose he has noticed her melancholy behavior. He comes in and has a present for her and opens a small case with a huge, heart-shaped blue-diamond on a chain. Rose is amazed, and Cal has her try it on. He tells her it was worn by Louis XVI and that they called it "The Heart of the Ocean." Cal tells Rose that she is royalty and there is nothing he would deny her if she would not deny him and asks her to open her heart to him. Rose stares in her mirror, touching the diamond, with a haunted look on her face.

In the next scene, Jack and Rose are seen walking together on the boat deck. Jack is talking about how he grew up. He then asks Rose what the real reason is that she came to see him. She has come to thank Jack for saving her. Jack asks why she wanted to kill herself. Rose says it was everything; the people and how helpless she was. She shows Jack her huge engagement ring. Rose talks about how all of Philadelphia's society will be at her wedding but she feels like she's so lost and nobody even notices it. Jack asks Rose if she loves Cal. Rose thinks that is a very rude question and refuses to answer, even though Jack is persistent about. Eventually, Rose becomes completely bewildered that Jack is asking this and prepares to storm off. She shakes Jack's hand and insults him more, saying he deserved it. They still are shaking hands and at last Rose starts to leave. Then Rose comes back and says that they are at her part of the ship and Jack should leave. Jack laughs and says she is now the one being rude. Rose, completely stumped on what to say next, sees Jack holding his sketchpad and seizes it as a way to spite him.

Jack doesn't mind her taking it and watches her open it. She slowly, but still angrily, remarks on how good they are and then they sit down on two deck chairs. Jack tells Rose he used to live in Paris and she is surprised. She comes across some very graphic drawings of prostitutes in various poses. Jack shows a picture of an older woman wearing a lot of jewelry. Jack says she used to frequently go to a bar wearing every piece of jewelry she owned, just waiting for her long lost love. They had called her Madame Bijoux. Rose says Jack has a gift; he sees people. He says he sees Rose and knows that she wouldn't have jumped.

Inside, Bruce Ismay is talking with Captain Smith. Bruce says he wants the last four boilers lit but the captain disagrees because they are making excellent time. Ismay disagrees, saying Titanic's maiden voyage must make headlines. Smith does not want to push the engines, but reluctantly complies to Ismay's demands.

Jack and Rose are talking on the promenade deck as the sun begins to set. Jack tells Rose about how his life has gone. He never seems to have any restraints that keep him in any one place. Rose wishes she could be like that and go wherever she wants. Jack says she can and that they will go together and drink beer, ride roller coasters, and ride horses on the beach right in the surf, but she has to ride with one leg on each side, like a man. He says he'll show her how and Rose asks Jack to teach her to spit like a man, but Jack takes it seriously and begins leading her to a more quiet place where less people are. Rose is very nervous and tells Jack she can't possibly do it, but Jack spits into the water to give Rose an example. Rose says it's disgusting, but she tries it after Jack pressures her to. She spits as plainly as she can and Jack tells her that's pitiful. Jack instructs her on how to do it better and he spits heartily into the water. Rose tries again and puts her head back a bit and spits into the water, this time much better.

He continues to instruct her and Rose listens intently, but then she sees her mother coming up behind them with her companions. Rose starts motioning for Jack to stop, but he has already been spotted trying to spit and so has Rose. Jack turns around and swallows the disgusting concoction in his mouth, caught completely red-handed with saliva still on his chin. Jack quickly wipes it off. Rose, embarrassed, starts to introduce Jack and explains how he saved her from slipping the night before. The other women are very impressed by Jack and how he saved Rose, but Ruth is seen eying Jack with disgust at his whole ensemble. As the dinner trumpet sounds, Ruth, Rose and the other women leave to dress, except for Molly Brown, who addresses Jack while he watches Rose leave. Molly asks if he has an idea what he's doing. He clearly doesn't, as he was planning on attending dinner wearing just his casual, unglamourous outfit. Molly then takes him to find something more elegant to wear.

Molly is in her cabin putting the jacket of a dinner tuxedo over Jack's shoulders. She is amazed at how close her son's clothes fit Jack. Jack enters the Grand Staircase with his usually untamed hair slicked back very well. He walks down the stairs and looks around, not really knowing what to do and slumps against a wooden post, but then tries standing up straighter and more sophisticated as he watches other men walking by. Cal comes down the staircase with Ruth, but he hardly even glances at Jack because he doesn't recognize him at all. Rose then is seen coming down and Jack does a double take on her. Jack stands at the bottom of the stairs as Rose comes closer to him. She takes Jack's arm and shows him to Cal and her mother. Cal is very impressed, saying, "You could almost pass for a gentleman." They then go down three decks to the dining room, where Rose begins telling Jack about some of the first class scandals. She points out a few notables such as John Jacob Astor (Eric Braeden) and his pregnant wife, Madeleine (Charlotte Chatton), and the Countess of Rothes. They then go towards their table and Jack escorts Molly along with Rose.

It then shows them sitting at dinner, where Jack is charming the table with his witty and wise comments. Jack is getting instructions from Molly and Rose on the side on when to use the table settings at the right time. Ruth asks Jack where he lives and he explains he doesn't dwell at one single place. Ruth asks how he has the means to travel, and he says he works from place to place, and got his ticket on Titanic at a lucky hand at poker. One of the men with them states how 'all life is a game of luck.' Cal disagrees, saying a real man makes his own luck. Rose's mother asks him if he finds that ruthless existence appealing. Molly is disgusted by that comment. Jack says he does and that all he needs is right there with him; air to breathe, blank sheets of paper, and he loves to awaken not knowing what will happen or who he'll meet and glances at Rose, who is listening intently. He says "Lifes a gift, and I don't intend on wasting it. You learn to take life as it comes at ya. To make each day count." Everyone is very impressed and gladdened by Jacks word's and Rose proposes a toast.

Towards the end of dinner, Jack is invited to have a few drinks in the smoking room with the men as the women stay at the table. He declines and Cal says it wouldn't interest him, considering it's about politics and business. After they leave, Jack secretly hands Rose a note that reads "Make it count. Meet me at the clock." Rose nervously complies, watching Jack facing the grandfather clock at the top of the Grand Staircase. Rose walks up to him and Jack smiles and asks, "So, you wanna go to a real party?" It then goes to a scene of a third-class party. Irish music is being played and people are dancing around merrily. People are arm wrestling and falling over from being so drunk. Rose claps happily as she watches Jack, whose hair is now a mess again and has removed his jacket, dance on a platform with the little girl seen at the beginning of the film. As the song ends, Jack tells the girl that he is now going to dance with Rose. Rose is very nervous to and doesn't want to, but Jack pulls her up with him. They have to get close for the dance and Rose is quite unsure of what to do. Jack and Rose hold each other's hands as Jack holds onto Rose's waist with the other and Rose grips Jack on the back the whole time. They move around the platform very fast and Rose is laughing and screaming at the same time and Jack laughs at Rose's reaction.

Jack then lets go of Rose and begins step dancing to the music. Rose watches and, inspired, throws her heels to someone in the crowd and dances beside Jack the same way. The two add unique steps to the dance, both turning and spinning as everyone watches. They then dance by linking arms and turning around and around. Jack and Rose watch as an arm wrestling match goes on between Tommy and another young man. Jack steals their beers and gives one to Rose. A man runs by and splashes the beer all over them. As Jack shouts after him, the wrestling match ends and as they start up again, Rose stops them. She asks if they are so tough why they cannot do this: Rose gradually begins standing on her very tip toes as Jack holds up the hem of her gown. Tommy and the other man express how impressed they are and start clapping. We see Lovejoy spying on Rose laughing in Jack's arms from the entrance to the room. Jack and Rose clap as a couple of the people are running around the room together, holding hands. Fabrizio is on the end and offers Rose his hand as he passes. She grabs it and Jacks hand and they run around the room. Rose is laughing, having the time of her life.

The next morning, Rose is sitting down at breakfast with Cal. She is quiet and doesn't seem to enjoy his company. Cal then reveals to Rose that he knows what she was doing below decks. Rose is angered that Cal had Lovejoy spying on her again. Cal tells her that she will never act like that again and Rose, gathering up her courage, says he has to stop commanding her because she is his fiancé. Cal gets extremely mad and flips over the table. He gets in Rose's face and says that she has to respect him. Frightened, she agrees. Cal storms out.

Ruth forbids Rose to ever see Jack again and tells her that their family is broke and that her marrying Cal will ensure their survival. Rose knows that they are broke and are keeping it secret as long as they can. Rose wants to see Jack, but knows she cannot. Soon after, all of first class is attending Sunday Mass. Jack then tries to go in and see Rose. Lovejoy stops him and offers him money to back off, but he refuses, saying all he wants is a quick word with Rose. Lovejoy gives two doormen money to escort Jack back to third. It then cuts to a part where Rose, Ruth, Cal, Mr. Andrews, and Captain Smith are seen talking. A crewman comes over and hands Smith an iceberg warning. Smith tells them it is very normal and that he has even had the last four boilers lit. Jack is then seen sneaking onto the first class deck. He sees a man watching his child play with a toy top and steals his coat and hat as a disguise.

As she is strolling with her mother, Cal, and Mr. Andrews, Rose tells Andrews she doesn't believe there are enough lifeboats for everyone onboard. Andrews tells her she is right and they are half short because the deck would look too cluttered. Cal says it's enough of a waste of space already with the boats that are there. They continue walking, but Jack grabs Rose's arm and she follows him into the empty gymnasium. Rose explains to Jack that she has to marry Cal and that she loves Cal. Jack goes on to tell her that she may be a spoiled brat, but underneath she is the most amazing women he's ever met. He knows he has nothing to offer her, but he can't turn away without knowing she'll be all right, and that if she jumps, he jumps. Rose says she's fine, but Jack disagrees, saying she is trapped and will die. Rose tells Jack she must go back and to leave her alone. Rose then is seen having tea with her mother and two other women. She sees a young girl about seven or so years of age, learning to have tea and cookies in a very sophisticated style. She becomes sad to see this, and cannot help to see that in herself. That is not the life she wants.

Jack is looking at the water solemnly on the very bow of the ship as the sun sets. Rose then comes up behind him, saying she changed her mind. He smiles as she begins to describe how she found him, but he shushes her. He tells her to give him her hand. Smiling, she does. Then, he instructs her to close her eyes. Still smiling, she follows suit. He helps Rose to stand up on the bars and he holds her so that she doesn't fall. He asks if she trusts him, and she does. He puts her arms out to her sides and tells her to open her eyes. She gasps in amazement at the tranquil, breathtaking sight before her. The wind is blowing forward against her as the ship goes on and all she can see is the sea and the beautiful sunset. "I'm flying!" she exclaims to Jack. Jack has his arms on Rose's waist as they stand there at the beautiful, romantic scene, the only ones at the ship's bow. He brings her hands to her sides and looks at her. Rose turns to face him and then they share their first passionate kiss as they fly at the bow of the ship.

The scene transforms back to the present-day wreck. Old Rose says sadly that was the last time Titanic ever saw daylight. Brock says how that had been six hours before the sinking, and Lewis is very angry that Smith has an iceberg warning, and yet goes even faster. Brock says that Smith believed he could've turned in time if he saw the berg, but he was wrong.

Back in 1912, Rose is laughing as she leads Jack into the sitting room. As she goes and unlocks the safe in the room, Jack eyes some of Rose's paintings and is dazzled by them, much like Rose and unlike Cal. Rose then shows Jack the diamond. As he marvels at it, Rose says she wants Jack to draw her nude wearing only the diamond. He agrees.

It then shows Rose pulling a green dragonfly hair clip from her curly hair. Jack is in the room and is positioning the couch the right way and sharpening his charcoals. Rose then comes in wearing nothing but a kimono and the diamond. Jack smiles at her and she says she has to have a nice drawing, as she is a paying customer, and throws him a dime. She looks at him sternly and then lets the kimono fall to the ground. Jack watches her very nervously and tells her to lie down on the couch and instructs the right way to position herself. Jack takes a deep breath. He puts his charcoal to the parchment and begins making the portrait. Jack watches intently with his blue eyes, his hair falling in his face, and continues the artwork, becoming more and more shaped as time goes on. It then goes back to old Rose. She smiles, describing her feelings at the time as the whole crew is staring at her, grinning dreamily. Lewis asks what happens next and Rose goes on...Jack signs the paper, April 14, 1912, JD. Rose is then seen with her kimono back on, writing a letter and tells Jack to put it in the safe. Rose then puts the necklace in there, too. It then goes to Lovejoy in the smoking room telling Cal nobody has seen Rose. Cal is angered, and orders him to find her. At nightfall, one of the crewman comes beside Captain Smith and says how calm the water is. Smith, however, is feeling guilty, as he knows there may be icebergs lurking and yet the ship is going at full speed.

Jack is then seen looking out the window, shivering at the cold. Rose comes in after changing into a pink and white gown. Suddenly they hear a door open and dash silently out of the room. Jack has forgotten his drawings and sketchpad, but they continue on anyway. Lovejoy walks into the empty room and then hears a door close. Jack and Rose go outside the room and start to leave but then Lovejoy sees the two. Jack opens a door that leads to the boiler room and locks it. The two go down into the boiler room, where the leader of the stokers comes and yells at them for coming down, but they just take off again.

They at last stop in a cargo hold where things are being stored, including the car first seen being brought onto the ship at the beginning. Nobody is inside except for them. Jack helps Rose into the back of the car as he sits up front and honks the loud horn. With a British accent, he asks Rose, "Where to, miss?" She whispers, "to the stars." Jack looks at her and Rose playfully grabs him by the back of his arms and drags him into the backseat with her. Jack wraps his arms around Rose and they look at each other. Jack asks Rose if she is nervous, and she says no. She kisses his fingertips as he watches her and then she looks back at him. Rose whispers, "Put your hands on me, Jack." And then they begin kissing passionately again. It then shows two men watching out for icebergs in the crows nest, commenting on the freezing cold. It then shows Officer Murdoch talking with another officer about a missing pair of binoculars and he then watches sternly out to the sea. Then, it goes back to Jack and Rose in the car, where the windows are completely steamed up. Inside, Rose asks Jack if he is all right because of his trembling, and he says he's fine.

The lead stoker in the boiler room is then seen showing two stewards where Jack and Rose went. As they begin to look, it goes back to Cal in the stateroom as he opens the safe. He looks quizzically at Jack's sketchpad and opens it. There, he sees Rose's naked portrait and a letter in Rose's handwriting that reads: "Darling, now you can keep us both locked in your safe." It indicates herself, as well as the diamond being locked away. Cal starts to tear the letter in fury, but then tells Lovejoy that he has a better idea. The stewards begin inspecting around the car. One of them notices Rose's handprint and points to it for the other to see. They both quietly creep towards the car, then one of them opens the door, only to find that it is empty. On the forward well deck below the bow, where both Murdoch and the men in the crows nest can see, Jack and Rose suddenly emerge from inside, hysterically laughing and holding hands. They spin around with each other and then stop. Rose's smile and laughter fades as she puts a hand to his lips. She says to him that when the ship docks in New York, she will disembark with him. Jack says this is crazy. Rose laughs, saying, "I know, it doesn't make any sense! Thats why I trust it." They look at each other and begin kissing again.

Murdoch smiles at the two and the men in the crows nest watch with grins as well. They laugh and talk about them for a moment and then look back out to sea....where they see a huge looming iceberg. They phone the bridge as fast as they can and tell them about it. All the crew go on alert, shouting, "Iceberg ahead" and orders of "Hard a' starboard!" which will turn the ship quickly to the left. The people in the engine rooms and the boiler rooms are in a frenzy, shouting orders, all hoping to veer away from the iceberg. The men in the crows nest watch with concern as they move ever closer and the ship still hasn't moved. Murdoch desperately hopes for the ship to turn, but when it at last begins to, it is too late. The iceberg punctures the starboard side of the ship. Jack and Rose's kiss is interrupted as they look around after feeling the ship begin to shudder violently. People all over the ship are shown looking around in confusion, including Fabrizio, who has been awoken from sleep. Thomas Andrews looks up at the shaking chandelier in his quarters. The stewards looking for Jack and Rose in the cargo hold are suddenly thrown against the walls as water comes rushing in. People on deck watch in amazement as the iceberg moves by, dangerously close to the ship. Murdoch runs and pulls a valve that will shut the watertight doors throughout the ship. All the men in the boiler rooms rush to get out before they are all closed, as the rooms begin flooding very fast. Some make it, some do not as all the doors close. Captain Smith then comes to Murdoch to see what has happened and he explains everything. Smith runs to the side of the ship, and he asks for an officer to find the ship's carpenter, who will determine how bad the damage is. People on the forward well deck play a game kicking pieces of ice along the deck. Fabrizio is then shown looking at the suddenly soaked floor as he begins to leave his cabin. Tommy then comes running up to him and they leave the deck to higher ground, followed by many other third-class passengers.

Jack and Rose begin to leave the side of the deck. They watch as a group of crewmen along with Andrews and Captain Smith chatting rapidly about the condition of the ship. The two realize the situation is severe and decide they have to tell Rose's mother and Cal. Cal is back in the stateroom, where Rose's mother is awake and the master-at-arms is because Cal claims he has been robbed. Lovejoy is out in the hallway and witnesses Jack and Rose solemnly returning, hand in hand. As they walk towards the room, Lovejoy slips the Heart of the Ocean into the pocket of the coat Jack stole earlier. Rose announces something serious is going on and Cal agrees as he orders Jack to be searched. The Heart of the Ocean is pulled out of his pocket. Jack and Rose both look in amazement and Jack yells at Rose not to believe he had stolen it. Rose doesn't understand how it could've happened, since they were together the whole time. Cal suggests Jack did it while she was putting her clothes back on. Jack then realized that Lovejoy put it in his pocket, but Rose is still skeptical, and the fact that Jack's jacket was stolen doesn't help either. She does nothing as they take Jack away to have him locked up, all the while Jack yells at Rose to believe he is innocent. It then goes to Andrews briefing the captain, the other crewmen, and Ismay on the damage to the ship. He describes that the ship cannot stay afloat with five compartments flooded and that the ship will go down first by the head until completely underwater. He announces that there is nothing they can do; Titanic will founder. Ismay is in shock, saying, "But this ship cannot sink!" Andrews disagrees, saying it is a mathematical certainty. The ship will go under in two hours. There aren't enough lifeboats for half the people and Smith realizes that Ismay will definitely get his headlines.

Back to Rose, who is alone with Cal and he slaps her across the face. A crewman comes in, telling them to both put their lifebelts on. In third class, everyone is being awakened by a crewman shouting to put on their life belts.