Guido Anselmi is an Italian filmmaker whose success both in his career and in his love life has brought him to the point of utter exhaustion, even physical collapse. Rehab and recovery will take place at a sumptuous, expensive and exclusive spa. While taking time off, Guido employs a popular critic, Carini Daumier, to look over the ideas he is mulling over for the subject of his next film. What he hears is not good: the ideas are vapid, confusing and ultimately far too weak to be worth filming.
During his stay, Guido is constantly having visions. The Ideal Woman is a major character in these hallucinations and he interprets her as the key to finding the perfect subject to film next. Meanwhile, his mistress arrives from Rome to see how he’s doing, but he sets up her in another hotel and then proceeds to do everything he can to avoid her.
His production crew relocates to the spa to help him get started on this next idea. Their arrival appears to be in vain, however, because Guido is committed to one thing above almost all else: avoiding as best he can his crew, nosy reporters and even the actors waiting to find out their roles. Pressure is mounting on Guido to move from the idea process to the filming process, but all he seems capable of producing are more visions which range from a dance with a hooker on the beach while still in school to punishment by the Catholic staff of the school. Guido wonders if these memories could possibly serve as a movie idea, but the critic rejects their sentimentality.
Guido looks forward to enjoying the rare opportunity of a personal audience with a Cardinal of the Catholic Church, which will take place in a sauna. Confessing to an overwhelming sense of unhappiness despite having everything any man could want, Guido is hoping for some kind of special insight or guidance. What he gets instead is rote recitations from the catechism that offer no help at all.
Guido invites his wife, from whom he is estranged, to join him and bring her friends. As they dance, there is the hint of reconciliation, but ultimately he deserts her in order to be with his movie crew which is inspecting a rocket replica on the beach to be used for the film. When Guido talks to his wife’s best friend Rosella he makes a startling confession: he wants to make an honest movie, but he has nothing honest to say.
An encounter with several of the important women in his life leads to a long and involved fantasy in which they are Guido’s harem who bathe him and treat him like a sultan. A showgirl rebels against such submission, however, and the fantasy turns dark with the woman attacking Guido through the most powerful weapon they have: forcing him to confront the ugly honesty about his empty life. Guido regains control and whips them back into submission.
Guido’s producer then confronts him about the delays in starting his next film and forces Guido to watch the screen tests he’s made. The tests turn out to be for roles that are consistent with the characters that have played a part in the narrative so far, including the prostitute on the beach and the Cardinal in the sauna. Also watching is Guido’s wife, who runs from the room after witnessing how her husband has chosen to portray her.
The vision of the Ideal Woman is realized in the person of an actress named Claudia. When he takes Claudia to visit one of the proposed sets, he explains that the movie will be about a creative burnout finding redemption through his concept of the Ideal Woman. Claudia expresses interest in the idea, but ultimately disapproves of it, saying that it won't be possible to sympathize with a man who lacks the capacity to love another human being.
Rejected by the personification of his vision of the Ideal Woman, Guido announces the production is being shut down. The producer nevertheless promises a press conference at the rocket ship set on the beach while Guido desperately attempts to escape the rush of journalists begging for information. Finally cornered amidst expectation of some sort of response, Guido crawls beneath a table and in his final fantasy shoots himself.
The rocket ship set is being disassembled by the crew amid news that the film has been permanently called off. The critic asserts that this decision was the only wise thing to do, but Guido has had a revelation. The epiphany is simple: rather than trying to film as a way of resolving personal issues that could help others, he need only accept life on the terms he lives it. Asking Luisa for help in making this a reality, she reluctantly agrees to try.
A troupe of clowns suddenly appear, led by Guido dressed as a child, and together they turn the rocket into a circus where all the people who have played a role in Guido’s memories parade down some steps. Guido directs them via a large megaphone into the circus ring and his mistress steps forward to inform him that she has figured out what he was attempting to say all along. Her message is that Guido needs everybody who enters his life and cannot be complete unless they are always there when he needs them. Everybody joins hands and starts running around the ring with the last to enter the circle being Guido and his wife.