In the 1997 general election, Tony Blair (Michael Sheen) becomes Britain's Labour prime minister. However, the Queen (Helen Mirren) is slightly wary of Blair and his pledge to modernise Britain, but he promises to respect the Royal Family. Three months later, Diana, Princess of Wales died in a car crash at the Alma Bridge tunnel in Paris. Blair's director of communications, Alastair Campbell (Mark Bazeley), prepares a speech in which Diana was described as "the people's princess". Blair gives his speech the next day and the phrase catches on. Within the next few days after Diana's death, millions of people across London display an outpouring of grief at Buckingham and Kensington Palaces. Meanwhile, the Royal Family are still at their summer estate in Balmoral Castle. Diana's death sparks division among members of the family, in which they observe that since Diana was divorced from her husband, Prince Charles (Alex Jennings) a year earlier, she was no longer a part of the family. Diana's funeral arrangements were thus best left as a private affair of her noble family, the Spencers. Charles argues that the mother of a future king cannot be dismissed so lightly, while the Queen authorises the use of an aircraft of the British Royal Flight to bring Diana's body back to Britain.
In London, flowers pile up before the palace railings, which forces the changing of the Queen's guard to use another gate. British tabloids become inflammatory about the lack of a statement from the Royal Family. Charles leaves no doubt that he shares Blair's views about the need for a statement. As the Royal Family's popularity plummets, Blair's acceptance rises, to the delight of his anti-monarchist advisers and wife Cherie(Helen McCrory). However, Blair does not share these sentiments. While disagreeing with the Queen's course of action, Blair begins to develop an admiration for her. Blair also disagrees with his wife's views and tells her that a republican Britain is ludicrous and begins to denounce the anti-monarchical disdain of his Labour Party advisors. Blair immediately calls the Queen at Balmoral and recommends three strong measures to regain public confidence for the monarchy: attend a public funeral for Diana at Westminster Abbey, fly a Union flag at half-mast over Buckingham Palace, and speak to the nation about Diana's life and legacy in a televised address.
Blair's recommendations outrage several other members of the Royal Family including Prince Philip (James Cromwell) and the Queen Mother(Sylvia Syms). Philip is surprised that Elton John is asked to attend and sing a song, "Candle in the Wind" in Diana's memory. They view such steps as an undignified surrender to public hysteria. The Queen seems concerned about this and although she shares their feelings, she has doubts as she closely follows the news. The Queen believes that there has been a shift in public values and that perhaps she should abdicate. The Queen Mother dismisses the idea by saying that she is one of the greatest assets her monarchy has ever had, stating: "The real problem will come when you leave". She also reminds the Queen of the promise she made in Cape Town, South Africa on her 21st birthday, in which she promised that her "whole life, whether it be long or short, shall be devoted to your service and the service of our great imperial family to which we all belong..." Meanwhile, Philip attempt to distract William and Harry (Jake Taylor Shantos and Dash Barber) from Diana's death by taking them deer stalking. While venturing out alone in her classic Land Rover, the Queen damages it while crossing a river and is forced to telephone for assistance. The Queen weeps in frustration, but catches sight of a majestic red deer which Philip, William, and Harry have been stalking. She is struck by his beauty and the two stare at each other. Hearing a distant gunshot, she shoos the animal away and decides to carry out Blair's recommendations. While preparing to return to London to attend a public funeral for Diana, the Queen is horrified to learn that the deer has been killed on a neighbouring estate, and asks to see the stag and is upset at its loss.
The Royal Family finally return to London to inspect the floral tributes and while watching live television coverage with his staff, Blair becomes angry and disappointed at his Labour Party advisors, in which he states that the Queen is admirable and Diana had thrown everything she offered back in her face and seemed to destroy everything held most dear by the Queen. The Queen later follows Blair's advice to make a public statement on live television, where she speaks about the life and legacy of Diana and describing her as "an exceptional and gifted human being". Two months after Diana's death, Blair visits Buckingham Palace to attend a weekly meeting with the Queen. The Queen finally regains her popularity, but she believes that Blair has benefited himself from her acquiescence to his advice and that she will never fully recover from "that week". The Queen cautions Blair that he will find that public opinion can rapidly turn against him and declares that times have changed and that the monarchy must modernise. When Blair suggests that he can help with this, the Queen replies: "Don't get ahead of yourself, Prime Minister. Remember, I'msupposed to be the one advising you".