Gil (Owen Wilson) falls in love with Adriana (Marion Cotillard) and goes back to Paris in the 1920s to give her a pair of earrings in order to complete a fantasy he read about in a book she apparently wrote. But before he can profess his feelings for her a carriage arrives and magically whisks them to Paris in La Belle Époque--the time period Adriana romanticizes. They meet Toulouse-Loutrec at Moulin Rouge and Adriana is eventually offered a job designing costumes for a ballet. She decides to stay there forever. Gil tries to change her mind, and in the process discovers that the past may seem ideal but there is still plenty to celebrate in the present.
Gil returns to the present, breaks off his engagement to Ines (Rachel McAdams), and decides to move to Paris. Walking the streets of Paris after Ines kicks him out, Gil runs into Gabrielle (Léa Seydoux) again. She tells him that they got another Cole Porter record at the shop she works in, which reminded her of him. It starts to rain and Gil offers to get her a cab so they can get coffee but Gabrielle tells him that she wants to walk because Paris is beautiful in the rain--just like he said earlier in the movie. The two walk off together.
Thanks Greg B!