Cameron's inspiration for the film came from his fascination with shipwrecks; he felt a love story interspersed with the human loss would be essential to convey the emotional message of the disaster. Production began in 1995, when Cameron shot footage of the actual Titanic wreck. The modern scenes on the research vessel were shot on board the Akademik Mstislav Keldysh, which Cameron had used as a base when filming the wreck. Scale models, computer-generated imagery, and a reconstruction of the Titanic built at Playas de Rosarito in Baja California were used to re-create the sinking. The film was partially funded by Paramount Pictures and 20th Century Fox. It was the most expensive film made at that time, with an estimated budget of $200 million.
Upon its release on December 19, 1997, Titanic achieved critical and commercial success. Nominated for fourteen Academy Awards, it tied All About Eve (1950) for the most Oscar nominations, and won eleven, including the awards for Best Picture and Best Director, tying Ben Hur (1959) for the most Oscars won by a single film. With an initial worldwide gross of over $1.84 billion, Titanic was the first film to reach the billion-dollar mark. It remained the highest-grossing film of all time until Cameron's 2009 film Avatar surpassed it in 2010. A 3D version of Titanic, released on April 4, 2012 to commemorate the centennial of the sinking, earned it an additional $343.6 million worldwide, pushing the film's worldwide total to $2.18 billion. It became the second film to gross more than $2 billion worldwide (after Avatar).
In 1996, treasure hunter Brock Lovett and his team aboard the research vessel Akademik Mstislav Keldysh search the wreck of RMS Titanic for a necklace with a rare diamond, the Heart of the Ocean. They recover a safe containing a drawing of a young woman wearing only the necklace dated April 14, 1912, the day the ship struck the iceberg. Rose Dawson Calvert, the woman in the drawing, is brought aboard Keldysh and tells Lovett of her experiences aboard Titanic.
In 1912 Southampton, 17-year-old first-class passenger Rose DeWitt Bukater, her fiancé Cal Hockley, and her mother Ruth board the luxurious Titanic. Ruth emphasizes that Rose's marriage will resolve the DeWitt Bukaters' financial problems. Distraught over the engagement, Rose considers jumping from the stern; Jack Dawson, a penniless artist, convinces her not to. Discovered with Jack, Rose tells a concerned Cal that she was peering over the edge and Jack saved her from falling. When Cal becomes indifferent, she suggests to him that Jack deserves a reward. He invites Jack to dine with them in first class the following night. Jack and Rose develop a tentative friendship, though Cal and Ruth are wary of him. Following dinner, Rose secretly joins Jack at a party in third class. Aware of Cal and Ruth's disapproval, Rose rebuffs Jack's advances, but realizes she prefers him over Cal. After rendezvousing on the bow at sunset, Rose takes Jack to her state room; at her request, Jack sketches Rose posing nude wearing Cal's engagement present, the Heart of the Ocean necklace. They evade Cal's bodyguard and have sex in an automobile inside the cargo hold. On the forward deck, they witness a collision with an iceberg and overhear the officers and designer discussing its seriousness.
Cal discovers Jack's sketch of Rose and a mocking note from her in his safe along with the necklace. When Jack and Rose attempt to tell Cal of the collision, he has his butler slip the necklace into Jack's pocket and accuses him of theft. Jack is arrested, taken to the Master-at-arms' office, and handcuffed to a pipe. Cal puts the necklace in his own coat pocket.
With the ship sinking, Rose flees Cal and her mother, who has boarded a lifeboat, and rescues Jack. On the boat deck, Cal and Jack encourage her to board a lifeboat; Cal claims he can get himself and Jack off safely. After Rose boards one, Cal tells Jack the arrangement is only for himself. As her boat lowers, Rose decides that she cannot leave Jack and jumps back on board. Cal takes his bodyguard's pistol and chases Rose and Jack into the flooding first class dining saloon. After using up his ammunition, Cal realizes he gave his coat and consequently the necklace to Rose. He later boards a collapsible lifeboat by carrying a lost child.
After braving several obstacles, Jack and Rose return to the boat deck. The lifeboats have departed and passengers are falling to their deaths as the stern rises out of the water. The ship breaks in half, lifting the stern into the air. Jack and Rose ride it into the ocean and he helps her onto a wooden panel only buoyant enough for one person. He assures her that she will die an old woman, warm in her bed. He dies of hypothermia but she is saved.
With Rose hiding from Cal en route, the RMS Carpathia takes the survivors to New York City where Rose gives her name as Rose Dawson. She later learns that Cal committed suicide after losing everything in the 1929 Wall Street Crash.
Lovett abandons his search after hearing Rose's story. Alone on the stern of Keldysh, Rose takes out the Heart of the Ocean — in her possession all along — and drops it into the sea over the wreck site. While she is seemingly asleep in her bed, photos on her dresser depict a life of freedom and adventure inspired by Jack. A young Rose reunites with Jack at the Titanic's Grand Staircase, applauded by those who perished.