A high school student, Olive Penderghast, finds herself the subject of her peers' gossip after lying to her best friend, Rhiannon, about losing her virginity to a college guy. Olive's small fib is overheard in the girls' restroom by Marianne, a fervent Christian girl, who spreads the rumor throughout the school. As Olive’s social status unexpectedly shifts from invisible to notorious, she embraces her newfound persona, inspired by Nathaniel Hawthorne’s "The Scarlet Letter," which she is studying in English class. Olive decides to embroider a red "A" onto her clothes, signaling the badge of shame from the classic novel and taking charge of the rumors about her.

As Olive's reputation grows, so does the complexity of her situation. She starts to receive attention from various boys at school, who want her to pretend to have sexual encounters with them to improve their own social standing. Olive agrees to help her fellow students, seeing it as a harmless charade that will ensure her own popularity. However, she soon finds out that her control over the narrative is not as strong as she thought, and the lies begin to spiral out of her grasp. The once inconspicuous Olive must navigate the challenges of high school life as her deception creates consequences she never anticipated, challenging her relationships and her sense of self.