Salt-Water Moon is a love story that takes place on a moonlit September night in 1926, in front of a late 19th century home in rural Newfoundland. Mary Snow is waiting for her fianc, Jerome, to come visit her after Bob Foote's wake, and is looking through a telescope at the moon and stars to pass the time. A voice is heard in the distance, and Jacob Mercer, six months older than Mary, and her former beau, appears on the road to the house. Mary is taken aback to see Jacob, who left Newfoundland abruptly for Toronto a year before to seek his fortune. Mary and Jacob spend the evening making small talk, star-gazing, arguing and discussing the past, including Jacob's sudden departure.

During Jacob's absence, Mary has become engaged to Jerome McKenzie. Mary reveals her reasons she feels trapped by her circumstances, and sees her engagement to Jerome as a solution, at least a financial one, to her troubles. Jacob reveals that he has returned home because he heard of her engagement. He is convinced that Mary still loves him, and has come to win her back. Mary accuses Jacob of coming back to break up the engagement, and in so doing, settle an old score with Will McKenzie, Jerome's father. Jacob gets angry and storms off. Mary hesitates, but her love for Jacob is still strong and she calls him back. The two sweethearts decide to face the future together.

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