NOTE: This spoiler was submitted by Spectre.
The film opens with our heroine Olive (Emma Stone) talking into a web cam about how her little white lie ballooned into an uncontrollable monster. She says she will explain her side, the true side of what occurred. She says that she was a nobody that no one noticed outside her best friend Rhiannon. Rhiannon wants to go camping with Olive but Olive lies and says she is going on a date. In reality, she just hangs around the house all week singing "Pocket full of sunshine" by Natasha Beddingfield.
The following Monday, pressed by Rhiannon, Olive lies about losing her virginity to a college guy. Rhiannon can't keep her mouth shut and it spreads like wildfire.
The school has a conservative teen church group run by Marianne (Amanda Bynes) who decides that Olive will be their next project. The group's harassment masked as concern comes to head at an English class run by Mr. Griffith (Thomas Haden Church). The class happens to be reading the Scarlet Letter, a novel about adultery and shame. When one of the girls from the church group makes a snide comment at Olive, Olive shoots back one of her own. This gets her sent to the Principal's office and Olive is given detention. It is there she first meets Brandon, a gay teenager who becomes a friend.
Later at home, we meet her folks and her adopted brother. Her mother Rosemary (Patricia Clarkson) and father Dill (Stanley Tucci) are very liberal yet supportive of their daughter and her choices. Brandon comes over later and propositions Olive; she'll pretend to sleep with him and make him popular, and she'll keep up her bad rep. She agrees and they pretend to have sex at a public party. Afterwards she bumps into an old crush Todd (Penn Badgley), who we learn she almost kissed years ago but instead lied about it when he said he wasn't ready.
Now after apparently sleeping with two guys and the harassment starting to get to her, Olive decides to go with the flow of it. She begins to wear more provocative clothing and stitches a red A to everything she wears. Guys begin to give her gift cards and money to say they done sexual things with her, which only increases her rep.
However, things begin to go downhill quickly. Rhiannon, partly jealous of the attention Olive is getting, joins the church group protesting her. Olive is able to reconcile with Marianne but it is destroyed on the same day when Marianne's boyfriend Micah (Cam Gigandet) gets an STD and says Olive gave it to her.
Olive sees Mrs. Griffith (Lisa Kudrow) who is crying and confesses that she is the one who slept with Micah. Olive promises to take the blame to save Mrs. Griffith's marriage.
Olive becomes disillusioned with the fact that though everyone thinks she is sleeping around, no one will take the chance to actually date her. This changes when a boy comes up to her and asks her out. The date goes sour when 1) Olive realizes the boy she's with is a long-standing crush of Rhiannon and 2) The boys attempts to pay her off. Olive tries to recover and asks what they'll say happened but the boy thinks he will actually get sex and tries to force himself on her. She resists and he drives off in a huff. Todd, who works at the restaurant, sees her and offers to drive her home.
Todd tells her that he doesn't believe the rumor mill and thinks she's actually great. He remembers how cool she was about not kissing him years ago and wishes she actually was his first kiss (her friend Rhiannon was and he says she was terrible). Olive is touched but says she can't be with him until she sorts out her life.
Olive proceeds to go to the boys that propositioned her and tells them to fess up but most deny it, or in the case of Brandon who comes out to his parents, leave town altogether. When she goes to Mrs. Griffith to make her come clean, she refuses to and uses her authority as an adult to make it clear Olive won't be believed over her. Olive runs to Mr. Griffith and tells the truth but immediately regrets how she did it, realizing she just broke up a marriage.
To get everything finally in the open, she does a song and dance number at a pep rally and pretends that she will be doing a sex show via a web cam with Todd. In actuality (as the whole movie has been an extended flashback) she confesses what she has done. She also makes up with Rhiannon, apologizing for lying. When she is finishing up, Todd comes by with a riding lawnmower and tells her to come out. She closes her web cam confession saying she really likes Todd and maybe she will lose her virginity to him in the future but at the end of the day it is no one business but her own. She leaves the house to kiss him and they ride off from the neighborhood on the lawnmower.