Jason (Adam Scott) and Julie (Jennifer Westfeldt) are lifelong friends who never dated each other. They live within a few floors of each other in the same rent-controlled apartment building. Their friends include two married couples, each with kids of their own. Jason and Julie decide to have a child together without having to be tied down with one another and be able to date.
In the course of events, Jason publicly defends their choice by explaining how wonderful Julie is, and says he could not have made a better choice for the mother of his child. Hearing this, Julie breaks up with her boyfriend because she thinks Jason wants her. But when Jason tells her he is moving in with his girlfriend Mary Jane (Megan Fox), Julie moves out of her apartment.
Among their friends, Missy and Ben separate while Alex ensures a happy marriage and family with Leslie.
Ultimately, dating does not work for either Jason or Julie because they both realize they only want to be with each other. It ends a la "What Women Want" with Jason telling Julie his true feelings for her and the two getting romantic at her apartment.