A young Frenchwoman, Jane, is trying to find somewhere to live in London. She eventually takes an 'L'-shaped attic room in a down-at-heel lodging house in W2 for 2 guineas a week, despite the poor decoration and grasping landlady, Doris. When she moves in she begins to meet the other residents; prostitutes Sonia and Jane, ageing former actress Mavis, West Indian Johnny and cocky would-be writer Toby.

Jane makes an appointment to see a private gynaecologist to arrange an abortion. She tells him that she doesn't wish to marry the baby's father and that her parents are very strict. The Doctor's flippant and mercenary attitude makes her decide against the termination and she leaves the surgery.

Jane takes a job in a local café. She begins to make friends with Toby and Johnny, and they tell her how to catch the bed bugs that plague the house. She confronts Doris with them but the landlady shouts at her and abuses her for being foreign. However Toby and Johnny persuade Doris to give her a new mattress.

Toby makes his feelings for Jane clear. They go to Hyde Park, where a warden stops them embracing. Jane tells him she has never been in love and advises caution.

Jane meets a friend, Terry. They go for a drink and she tells him that she is pregnant and that he is the father. He offers to go back to her or pay for an abortion but she declines, telling him she did not love him and only had sex because she was bored with being a virgin.

Jane and Toby go to a jazz club where Johnny plays. When they return Toby tells her he loves her. They make love but an upset Johnny hears them through the thin walls. Next day at the café Jane prepares a special table for Toby, but he doesn't show up. Johnny tells her he had guessed she was pregnant and told Toby out of jealousy. She visits Sonia, who tells her about her work as a prostitute.

Mavis accosts her and gives her pills to make her miscarry. Depressed by Toby's departure she takes them. She collapses in the street and wakes up in hospital. The baby has been saved. She returns home and sees Toby. They row but make up and decide to try having a relationship.

She visits Mavis who tells her about theatrical days and reveals that she had a long-term lesbian partner.

Christmas is approaching. Toby is depressed because he feels financially unable to support Jane and decides to end their affair. Jane goes to Doris's Christmas day party for the residents without him. Mavis performs a musical number, interrupted by Jane going into labour.

Jane gives birth to a baby girl. Toby goes to see her and gives her a story called 'The 'L'-Shaped Room', about their lives. Jane tells him she has given up the room and is returning to her parents in France to bring up the baby. Although their relationship has not worked out Jane assures him that he helped her decide to keep the baby.

She goes back to the house to collect her suitcase. A new girl has taken up her room and seems unimpressed with the residents. Jane leaves the story in Toby's room, complaining that it has no ending.