Bollywood/Hollywood centers on the character of Rahul Seth, a young, rich, Indo-Canadian living in Toronto whose widowed mother is eager to get him married after the freak-accidental death of his white pop singer girlfriend, Kimberly. Furthermore, the mother proclaims that the impending wedding of her daughter Twinky and Bobby will not take place until Rahul has found himself a bride first. The pressure mounts on Rahul as he finds out that Twinky must get married to preserve the family's reputation because she is pregnant.
Rahul goes to a bar and there meets Sue. Thinking she is a Spanish escort (non-sexual companion), he hires her to pose as his fiancée. Rahul eventually discovers that Sue is actually Indian (her name is short for Sunita). Despite his initial anger at her lie, the two grow closer-due in no small part to a confidence boost Sue gave to Rahul's tormented younger brother, Govind, who incorrectly believes that no one cares about his welfare. Rahul and Sue eventually consider one another a fit match. Pleased, Mrs. Seth agrees to sanction Twinky's wedding.
Rahul and Sue grow more intimate, sharing stories about their pasts. It is revealed that Sue was once offered as a bride to the well-meaning but dim-witted professional wrestler Killer Khalsa; offended that her parents would even consider such a match, she has been playing mischief in revenge. This mischief is not fully explained, but her liking for it is suggested by her audacity. Sue is quite immune to social norms; she speaks bluntly to all, particularly to Rocky, Rahul's driver, who she knows (but does not reveal to others) is a famous drag queen.
The blossoming romance is shaken, when a drunken friend at Bobby's bachelor party states that Sue is a prostitute and that he himself has paid her for sex in the past. Rahul is uncertain, causing Sue to be so hurt that he would question her honesty and integrity that she leaves him. He is forced to confess to his family that he never really courted Sue but merely bribed her to act the part of his fiancée. His mother is forced to postpone Twinky's wedding until Rahul can find a new bride, becoming despondent that Twinky's pregnancy will make the family social outcasts, for which Rahul calls her out for being a hypocrite. Twinky enters the room and tells her mother to stop crying, as Twinky and Bobby have eloped. Twinky thanks Rahul for doing so much to help her.
Prodded by Rocky ("Sue ma'am is special. Anyone who can keep a secret deserves the best"), by his insightful, Shakespeare-quoting grandmother and by the ghosts of his father and Kimberly, Rahul goes after Sue. In a balcony scene facilitated by Sue's father and mother, Rahul professes his true love to Sue, who abruptly leaves him standing on her balcony. Rahul initially leaves in his limo, then tells Rocky to return to Sue's house, only to find that Sue has replaced Rocky in the driver's seat.