It is 1999 on the enchanting Greek island of Skopelos (Kalokairi). The story begins at the remote Aegean island hotel, Villa Donna, run by Donna Sheridan (Meryl Streep), her daughter Sophie (Amanda Seyfried) and Sophie's fiancé Sky (Dominic Cooper).

Prior to her forthcoming marriage, Sophie nervously posts three wedding invitations ("I Have a Dream") to three different men, one of whom she believes may be her father. From three cities across the globe, three men set off to return to the island, and the woman that had enchanted each of them 20 years earlier.

Back on that island, Donna is rousing her staff for the frenetic day ahead as Sophie's bridesmaids and best friends Ali and Lisa (Ashley Lilley and Rachel McDowall) arrive and she shares with her best mates a scandalous secret: Sophie has found her mother's diary and learned she has three possible dads; American businessman Sam Carmichael (Pierce Brosnan), Swedish adventurer Bill Anderson (Stellan Skarsgard), and British banker Harry Bright (Colin Firth). Without telling her mother, she has invited all three to her wedding ("Honey, Honey"), believing that after she spends time with them, she will at last know who her real father is.

Meanwhile, back on the Greek mainland, Sam, Bill and Harry; strangers until today have met at the harbour. Fortuitously, Sam and Harry have missed the ferry to Skopelos (Kalokairi), and Bill offers them a lift on his yacht to reconnect with the woman who broke all their hearts 20 years ago.

Back on Skopelos, Donna is ecstatic to reunite with old friends and former "Donna and The Dynamos" bandmates, wisecracking author Rosie (Julie Walters) and wealthy multiple divorcee Tanya (Christine Baranski), and reveals her mystification at her daughter's desire for a traditional wedding or any wedding at all. At the Villa, Sophie introduces Tanya and Rosie to true love Sky, and tells them about their idea of designing a website to attract tourists to the island. Donna explains her precarious finances ("Money, Money, Money") to her girlfriends as she takes them on a tour of the Villa. Hounded by her creditors, Donna dreams of a "rich man's world," sunbathing on a yacht and being deliciously pampered. She is brought back to reality as an ominous crack appears in the courtyard.

The three men arrive, and Sophie smuggles them to their quarters and sheepishly explains that she, not her mother, sent the invitations. She begs the men to hide so Donna will have a fantastic surprise at the wedding; seeing the old friends of whom she "so often" favorably speaks. They overhear Donna working in the storeroom below preparing to fix the crack and the men swear to Sophie they will not reveal her secret. Sophie leaves by the window just in the nick of time, as Donna peeps through the trapdoor.

She is dumbfounded to find herself face to face with the three former lovers she could never forget ("Mamma Mia!"), while the men clumsily make up excuses for their presence. Donna is adamant; they simply cannot stay. Visibly shaken, she confides in Tanya and Rosie ("Chiquitita") a secret she has kept from everyone - she is uncertain which of the three men is actually Sophie's father. No matter, as Tanya and Rosie rally her spirits by getting Donna to join in with the female staff and islanders accompanying a musical number intended to make her forget her woes. Donna and The Dynamos reclaim their glory days and champion the women of the island in a call to liberation ("Dancing Queen").

Sophie finds the men aboard Bill's yacht, and they take a trip around the gorgeous island of Skopelos ("Our Last Summer") and tell her stories of Donna as a carefree girl. Upon their return, Sophie musters up the courage to speak with Sky about her ploy, but loses her nerve. Sky and Sophie sing passionately to each other ("Lay All Your Love on Me"), but are interrupted by the bachelor party that has descended upon Sky to kidnap him for his last night of freedom.
At Sophie's bachelorette party, Donna, Tanya, and Rosie perform in a surprise one-night-only event as Donna and The Dynamos ("Super Trouper"). Sophie is delighted to see her mother rock out, but becomes nervous when the festivities are interrupted by the arrival of Sam, Bill and Harry. She decides to get each of her three prospective dads alone to talk.

The young bride uses the confusion of her amorous girlfriends' dancing with the men ("Gimme! Gimme! Gimme! (A Man After Midnight)") to speak with Sam about his love for Donna. Next, she's on to Harry about his desire, if any, for children. Finally, Bill reveals that the old woman who gave Donna the money to invest in her Villa was his Great Aunt Sofia, and Sophie guesses she must be her namesake. That's it! Bill must be her father! Sophie asks him to give her away and to keep their secret from Donna until the wedding.

Over the moon, Sophie returns to the party. But her happiness is short-lived as Sam and Harry each tell her they must be her dad and will give her away ("Voulez-Vous"). A shocked Sophie can't tell them the truth and, overwhelmed by the consequences of her action, faints on the dance floor.

In the morning, Rosie and Tanya reassure a frantic Donna they will take care of the men. Donna confronts Sophie in the courtyard, mistakenly believing Sophie wants the wedding stopped. Sophie angrily says that all she wants is to avoid her mother's mistakes and storms off. An upset Donna is accosted by Sam, full of fatherly concern at Sophie getting married so young. Donna dresses him down, and both realize they still have feelings for each other ("SOS").

Meanwhile, on Bill's boat, Bill and Harry are about to confide in each other, but are interrupted by Rosie who is startled to find Bill, naked, making breakfast. Similarly, pulses are racing down on the sandy beaches as Tanya and young Pepper (Philip Michael) continue their May-December flirtations from the previous night ("Does Your Mother Know").

With her plans falling apart and wedding in jeopardy, Sophie knows it is time to come clean to Sky and ask for his help. He reacts angrily to his fiancée's deception and Sophie must turn to her mother for support.

As Donna helps her daughter dress for their wedding, the rift is quickly healed and Donna reminisces about Sophie's childhood and how quickly she's grown ("Slipping Through My Fingers"). Then and there, Sophie decides the only parent she's ever known is the only one who should give her away. As the staff and bridesmaids accompany Donna and Sophie to the chapel, Sam lies in nervous wait. Donna waves the wedding party on, and he begs Donna to talk. She cuts him short, however, revealing the deep pain she felt over losing him ("The Winner Takes It All").

After the ceremony begins, Donna can hold her tongue no more. She confesses to Sophie that her father is present but he could be Sam, Bill or Harry. Sophie, in a shocker of her own, admits she invited them. The three men concur that they would be quite happy to be one-third of a father for such a girl. The surprises keep coming when Sophie tells Sky they should postpone their wedding and travel the world, as they have always wanted. It appears that preparations have been in vain until Sam steps in with the final curveball: he proposes to Donna.

She accepts ("I Do, I Do, I Do, I Do, I Do"); Sam and Donna then go through an impromptu ceremony, surrounded by the churchful of guests.

At the wedding reception, Sam sings to Donna, who he has loved for 21 years ("When All Is Said and Done" [in the film only, not the musical]), which prompts Rosie to make a coy play for Bill ("Take a Chance on Me"). All the couples present proclaim their love and, magically, water from Aphrodite's fountain of love bursts through the crack in the courtyard at Villa Donna.
The story concludes as Sophie and Sky bid farewell to Skopelos island and sail away to a new life together ("I Have a Dream"), one full of hope and promise.

Donna, Tanya, and Rosie reprise "Dancing Queen" during the first part of the credits, then launch into "Waterloo" with the rest of the cast. Finally, Amanda Seyfried sings "Thank You for the Music".

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