The film opens in February 26, 1995 to where Selena (Jennifer Lopez) performs at the Houston Astrodome, which was to be one of her last concerts. She arrives on the Astrodome stage to a cheering reception, and starts singing her medley of Disco songs, "I Will Survive", "Last Dance" and "On the Radio". After that the movie flashes back to 1961, where young Abraham Quintanilla (Panchito Gomez) and the Dinos practice their first gig singing a song called "Blue Moon", and after being rejected by a white restaurant owner for an audition (due to the "Whites Only" policy), they go to a nightclub called "Lerma's" to perform in front of a Mexican audience, but when they sing "We Belong Together", the crowd starts to riot and not knowing any Spanish music, Abraham and the Dinos ride away in a Police car.

In 1981, Abraham (now played by Edward James Olmos) has married a woman named Marcela Samora (Constance Marie) and now has three children: Abraham III (nicknamed A.B.) (Rafael Tamayo), Suzette (Victoria Elena Flores), and Selena (Rebecca Lee Meza). Abraham discovers Selena's singing talent one day while he is playing the guitar after coming home from work. Amazed by the young girl's voice Abraham decides to create a band called "Selena y los Dinos", with Selena as the lead singer, A.B. on bass, and Suzette on drums. The kids initally do not want to be a part of any band, but soon Abraham opens a restaurant called "Papa Gayo's" and Selena sings her rendition of "Over the Rainbow" to the customers who applaud cheerfully afterwards. Soon, Abraham tells Selena about a spanish song called "El Reloj" ("The Clock") and tells her to learn Spanish, so she doesn't have trouble singing in front of Mexicans like he did.

Later, the Quintanilla family goes bankrupt and end up losing the restaurant and move to Corpus Christi, Texas to live with Abraham's brother. There, Selena performs at a carnival, where she is poorly received, and one day while the family is on the beach Marcela hears a song on the radio and teaches Selena a dance called "The Washing Machine".

As the years pass, Selena grows more popular and years later in 1989, Selena (now played by Lopez, see above), A.B. (now played by Jacob Vargas), and Suzette (now played by Jackie Guerra) have grown up. The Dinos have also expanded with Pete Astudillo (played by himself) on backup vocals, and Ricky Vela (also played by himself) on keyboard, and Joe Ojeda (Ruben Gonzalez) also on keyboards, and they have a guitarist as well. During one performance Abraham notices Selena removing her jacket in front of an audience exposing a sparkling bra Selena calls a "bustier" and Abraham is not pleased by this, as he has become overprotective for Selena and confronts her after the concert, and yet the two have a heated argument where Marcela reveals she helped Selena make the outfit. Later on, Selena talks to Abraham and their differences are settled.

A year later, while Selena is talking to her cousin Deborah (Seidy Lopez) about her fashion designs, Suzette informs them of a man who is being tested by A.B. and Abraham with his guitar. The man is Chris Perez (Jon Seda) who after joining the band, develops a friendship with Selena. Soon a new song by Selena y los Dinos called "Como La Flor" reaches #1 on the Tejano Music chart which Suzette overhears on the radio, and upon telling Selena, A.B. and the other Dinos about this, they get excited. Soon after the success of "Como La Flor", Selena and the Dinos go to Monterrey, Mexico to perform in front of a Spanish audience. There Selena has an interview and when she says she feels very excited in Spanish, she says "Excited" in English, which causes the interviewers and audience to go into laughter. Soon Selena performs "La Carcacha" in the concert at Monterrey Mexico, but the crowd gets too excited and the stage almost collapses until Abraham and the concert promoter gets the band off the stage to calm down the crowd. After Selena insists she can calm down the crowd, she and the Dinos return to the stage where Selena sings "Como La Flor", which calms down the audience, and during the performance they sing along with Selena.

One day, while taking a walk on a beach pier, Chris confesses his love for Selena saying that he never felt that way about her since his parents split as a child, and after Selena says she feels the same way about Chris, they share a passionate kiss. They plan to get married, but one night on the bus, Abraham catches Selena and Chris hugging. Enraged, he stops the bus and tells almost everyone to get off (except Marcela, A.B., and Suzette), and he confronts Selena and Chris about the relationship. They inform Abraham of their plans to get married, and an overprotective Abraham fires Chris from the band and Chris angrily walks off the bus, and Abraham threatens to disband the Dinos if Selena follows him. Selena is heartbroken and after the bus travels back on the main road, she cries in Marcela's arms lamenting about how much she loves Chris.

Selena and Chris continue seeing other secretly behind Abraham's back, but soon Selena becomes tired of hiding from her father and tells Chris that she wants to marry him right away. Selena and Chris elope, but once it makes headlines on the radio Selena decides to wait a day before seeing Abraham to talk to him about the marriage. When Selena does see Abraham he tells her that he's glad she did what she did, but he only wanted what was best for her. Selena and Abraham have a tearful reconciliation and afterwards Chris is accepted into the Quintanilla family and returns to being the guitarist for Los Dinos.

Later on during one of Selena's live performances, Jose Behar (the head of EMI Latin) and his music associates tell Abraham that they want to make an English language album for Selena, with the best producers, best songwriters, everything first class. Soon, Selena opens her first boutique called "Selena Etc." which her fan-club president Yolanda Saldivar (Lupe Ontiveros) manages. Selena later travels to Los Angeles, where her album Selena Live! wins a Grammy Award for Best Mexican-American album.

As time passes, Selena finally begins her own fashion show and as 1995 begins she starts recording her Crossover Album, and after Selena finishes recording "I Could Fall in Love" Abraham and Selena have pizza where Abraham tells Selena he's very proud of her. Later on, Yolanda Saldivar gives Selena a friendship ring and Selena calls Yolanda "a good friend".

Soon Selena and Chris make future plans about having children, but soon Selena finds out from Abraham that Yolanda was stealing money from the fan club and a lot of business records have gone missing. Abraham, Selena, and Suzette confront Yolanda about the evidence, but she denies taking anything from Selena at all. After the confrontation, an upset Selena questions Yolanda about stealing money, but Yolanda still insists she would not steal anything and to give her a chance to prove it.

Selena dreams about her success in the English language market, but her dreams are cut short when on March 31, 1995 Selena is shot and killed by Yolanda Saldivar while attempting to recover the missing records from her at a Days Inn motel (although the location is not referenced in the film). Selena is rushed to a hospital, where she dies of blood loss. Before the arrival, we see a paramedic lift her lifeless hand in which the ring Yolanda gave to Selena falls out. During all this, Yolanda is locked in her truck during her standoff with police and she threatens to kill herself but does not, and is instead sobbing about killing Selena lamenting that she shot her "best friend".

Then during a sequence during which the song "Dreaming of You" plays, a brief shot of the empty Houston Astrodome is shown, followed by a sequence where Chris and the Quintanilla family are in grief after learning about Selena's death from a doctor at the hospital, followed by another sequence which shows Selena's fans holding candle lights in honor of her memory. The movie ends with film footage of the real Selena and a photo still of the real Selena that reads "Selena Quintanilla Perez 1971 - 1995".