The film is largely fictional, although several of the characters are based on real people. In addition, many of the characters, lines, and plot devices are references to Shakespeare's plays.
Shakespeare in Love won a number of Academy Awards in 1999, including Best Picture, Best Actress (for Gwyneth Paltrow) and Best Supporting Actress (for Judi Dench). It was the first comedy to win the Best Picture award since Annie Hall (1977) and no comedy has won the award since.
The film makes no pretense at historical accuracy. The basis of Romeo and Juliet, for example, was a poem and not one of Shakespeare's romances.
The film features many comic anachronisms: a psychotherapist; a mug marked "A present from Stratford-on-Avon"; Shakespeare leaping into a ferry and saying "Follow that boat!"; Queen Elizabeth I remarking "Have a care with my name or you will wear it out"; and Shakespeare anticipating the phrase "The show must go on!"
The characters of Ralph Bashford, James Hemmings, Edward Pope, Sam Gosse, James Armitage, Viola de Lesseps, Robert de Lesseps, Lady de Lesseps, Hugh Fennyman, and Lord Wessex did not exist.
The characters of Philip Henslowe, Richard Burbage, Ned Alleyn, Will Kempe, Edmund Tylney, Augustine Philips, John Hemmings (spelled in real life as "John Heminge"), George Bryan, Christopher Marlowe (played in an uncredited cameo by Rupert Everett), and John Webster did exist, but their actions in the film are fictitious.
There were neither tobacco plantations nor English colonies in America in the 1590s. Moreover, Wessex and Viola would not have gone to Virginia; instead, Wessex would have had a surrogate run his plantations.
As the film begins, Shakepeare's patron Philip Henslowe (Geoffrey Rush) finds himself in debt to loan shark Hugh Fennyman (Tom Wilkinson). Henslowe offers Fennyman a partnership in the upcoming production of Shakespeare's newest comedy, Romeo and Ethel, The Pirate's Daughter promising that it will be a hit. This play will later be renamed Romeo and Juliet and be reworked into a tragedy (but with some comical undertones with a few characters, like the Nurse).
Will Shakespeare is suffering from writer's block and has not completed the play, but begins auditions for Romeo. A boy named Thomas Kent is cast in the role after impressing Shakespeare with his performance and his love of Shakespeare's previous work. Unbeknownst to Shakespeare and the rest of the theater company, Kent is young noblewoman Viola de Lesseps. Viola de Lesseps's dream is to act, but as women were barred from the stage, she must disguise herself as a young man in order to fulfill her dream.
After Shakespeare discovers his star's true identity, he and Viola begin a passionate secret affair. There are strong parallels between the pair's romance and the romance in Romeo and Juliet, including the ballroom scene from act 2 and the balcony scene immediately following it. The element of forbidden love forms the basis of Shakespeare's inspiration, and many of their conversations later show up as some of the most famous quotes in the play.
Inspired by Viola, Shakespeare begins writing feverishly. His work in progress also benefits from the off-hand advice of playwright and friendly rival Christopher Marlowe (Rupert Everett). Yet Shakespeare and de Lesseps know that their romance is doomed. Shakespeare is married, albeit long separated from his wife, and Viola is a noblewoman whose parents would never permit her to marry a commoner such as Shakespeare. In fact, Viola's father has privately arranged a betrothal for her to Lord Wessex (Colin Firth).
Viola is called to the court of Queen Elizabeth I (Judi Dench), and Shakespeare dons a woman's disguise to accompany her. At court, Shakespeare manages to goad Wessex into betting the grand sum of fifty pounds that a play cannot capture the nature of true love. If Romeo and Juliet is a success, Shakespeare as playwright will win the money. The Queen, who enjoys Shakespeare's plays, agrees to be a witness to the wager. The true purpose of the meeting is revealed when Wessex announces his intent to marry Viola.
The Lord of Revels, an official of the Queen, learns that there is a woman in the theater company at the Rose playhouse. He orders the theater closed for this violation of morality and the law. Left without a stage or lead actor, it seems that Romeo and Juliet must close before it even opened. Shakespeare is offered one last chance by the owner of a competing theater, the Curtain, who offers his own theater to Shakespeare. Shakespeare will take the role of Romeo himself, with a boy actor playing Juliet.
Viola learns that the play will be performed on the very day of her wedding. After the ceremony, Viola's loyal nurse (Imelda Staunton) helps her slip away to the theater. In one final twist, mere moments before the play begins, the boy playing Juliet starts experiencing the voice change of puberty. Viola takes the stage to replace him and plays Juliet to Shakespeare's Romeo. Their passionate portrayal of two lovers inspires the entire audience.
The Lord of Revels arrives at the theater with Wessex, who has deduced his new bride's whereabouts. The Lord invokes the name of the Queen to arrest all there for indecency. Suddenly, Elizabeth I's voice rings out from the back of the theater: "Have a care with my name - you will wear it out!" The Queen had decided to attend the play, and says that she will handle this matter herself. Although she recognizes Viola in her guise as Thomas Kent, the Queen does not unmask Viola, instead declaring that the role of Juliet is being performed by the boy Thomas Kent.
However, even a Queen is powerless to break an official marriage of the Church. Queen Elizabeth orders "Thomas Kent" to fetch Viola so that she may sail to America. She also states that Romeo and Juliet has accurately portrayed true love and Wessex is forced to pay Shakespeare the fifty pounds. This is enough to allow Shakespeare become a shareholder in a new theater. The Queen then commissions Shakespeare to write something "a little more cheerful next time." Viola and Shakespeare part, never to meet again. She must accompany Wessex to a colonial settlement in Virginia. Shakespeare immortalizes her by making the main character of his new play, Twelfth Night, a strong young woman named Viola who also disguises herself as a boy.
The main source for much of the action in the film is Romeo and Juliet, which the events in the film ultimately inspire Will to write. Will and Viola play out the famous balcony and bedroom scenes; like Juliet, Viola has a witty nurse, and is separated from Will by a gulf of duty (although not the family enmity of the play—the "two households" of Romeo and Juliet are supposedly inspired by the two rival playhouses). In addition, the two lovers are equally 'star-crossed' — they are not ultimately destined to be together (since Viola is of nobility promised to marry Earl of Wessex and Shakespeare himself is already married). There is also a Rosaline, with whom Will is in love at the beginning of the film.
Many other plot devices used in the film are common in various Shakespearean comedies and in the works of the other playwrights of the Elizabethan era: the Queen disguised as a commoner, the cross-dressing disguises, mistaken identities, the swordfight, the suspicion of adultery (or, at least, cheating), the appearance of a 'ghost', and the 'play within a play'. The film also features numerous sequences in which Shakespeare and the other characters utter words that will later appear in his plays:
Christopher Marlowe appears in the film as the master playwright whom the characters within the film consider the greatest English dramatist of that time — this is accurate, yet also humorous, since everyone in the film's audience knows what will eventually happen to Shakespeare. Marlowe gives Shakespeare a plot for his next play, "Romeo and Ethel the Pirate's Daughter" ("Romeo is Italian...always in and out of love...until he meets...Ethel. The daughter of his enemy! His best friend is killed in a duel by Ethel's brother or something. His name is Mercutio.") Marlowe's Doctor Faustus is quoted ad nauseam: "Was this the face that launched a thousand ships/ And burned the topless towers of Ilium?"
The child John Webster who plays with mice is a reference to the leading figure in the Jacobean generation of playwrights. His plays (The Duchess of Malfi, The White Devil) are known for their blood and gore, which is why he says that he enjoys Titus Andronicus, and why he says of Romeo and Juliet when asked by The Queen "I liked it when she stabbed herself."
When the clown Will Kempe says to Shakespeare that he would like to play in a drama, he is told that "they would laugh at Seneca if you played it," a reference to the Roman tragedian renowned for his somber and bloody plotlines which were a major influence on the development of English tragedy.
Will is shown signing a paper repeatedly, with many relatively illegible signatures visible. This is a reference to the fact that several versions of Shakespeare's signature exist, and in each one he spelled his name differently.