Some friendships grow so intimate that they start feeling like home. Pestonjee is a film about such a friendship. The “two peas in a pod” as neighbours refer to them are Pestonjee/Pesi and Pirojshah. Both are very close and are involved in almost every aspect of each other’s daily life. The two friends plan on getting married. Pirojshah goes to see a girl, Jeroo, and finds this alliance suitable. He takes some time to confirm his assent as he checks their horoscopes.
Meanwhile, Pesi meets the same girl and agrees to marry her instantly. As time passes, both the friends fall in love with the same woman. Soon, Pesi and Jeroo are married. Pesi also happens to meet Soona Mistry, a widow of a late solicitor who knows the business well and was helping him with a land dispute he had with his brother.
After some time, Pirojshah is transferred out of Bombay to a small town. He misses the company of his friends Pesi and Jeroo. Five years later, he receives news that they are expecting their first child. Excited and happy for them, he visits Bombay for a week, only to find out that everything has changed. Pesi and Jeroo have grown distant from each other, and the kindness in their relationship has faded. He also finds out that Pesi has grown closer to Soona, whom he never really liked. Later in conversation, Pesi tells Pirojshah that it is time that he moves on and lives a separate life of his own instead of interfering in his life.
A heartbroken Pirojshah returns back to work. Two years later, he is promoted and transferred back to Bombay. He goes back to Bombay, once home because of Pesi, and they reunite. Unfortunately, Pesi dies unexpectedly because of a cardiac arrest. After his death, Pirojshah comes to realize a certain truth about life and their friendship.