The film opens with a grainy shot of Jane Burnham lying on a bed, complaining about her father. Off screen, a boy (presumably the camera operator) asks her whether she wants him to kill her father, and she sits up, looks directly into the camera, and says "yes". The shot changes, and we are flying over a town while a man - Lester Burnham - tells us that he will be dead in less than a year. We then witness a typical morning at the Burnham house: Lester masturbates in the shower; Carolyn cuts some roses from her garden; Jane researches breast augmentation surgery on line; on the drive to work and school, Lester huddles in the backseat while his wife and daughter ride in the front. At work, Lester learns that an efficiency expert, Brad Dupree, has been hired to evaluate which employees are worth keeping, and which are expendable. When he complains about it to Carolyn on the way home, she is completely unsympathetic. The couple begins to argue as they enter the house and the camera pans over a series of happy family pictures. That night at dinner, Jane and Carolyn bicker. When Lester tries to have a conversation with Jane, she responds badly and leaves the table. Lester follows her and continues to try to talk to her as the camera pans out and transitions to a shot from the grainy camera that we saw earlier. Across the street, a boy - Ricky Fitts - is using a video camera to shoot the family: he watches as Jane leaves the room, and continues recording while Lester washes the dishes. Suddenly Lester looks up, but Ricky has already disappeared.
Carolyn arrives to set up for an open house. She strips to her underwear and proceeds to clean the entire house, all the while repeating inspirational mantras about how she "will sell this house today." The camera follows as Carolyn shows several groups of people around. Despite her upbeat attitude and attempts to put a positive spin on every aspect of the (decidedly unremarkable) house, at the end of the day it remains unsold. Carolyn begins to sob uncontrollably, but then abruptly cuts her tears off by screaming and slapping herself. That night Carolyn drags Lester to the high school basketball game, where Jane's cheerleading squad is performing a new dance routine. As the routine begins, Lester suddenly zeroes in on one of Jane's teammates, Angela. He is mesmerized by her, and as he watches he suddenly begins imagining that he is sitting alone in the gym while Angela performs an erotic dance just for him. Just as she begins to unzip her sweater to release a cloud of vividly colored rose petals, he snaps back to reality. When Jane and Angela walk out of the gym, Jane is annoyed to see that her parents are waiting for her. Lester is overly enthusiastic about meeting Angela, and Jane and Angela quickly leave to go out for pizza. Jane complains about her dad's behavior, but Angela is amused and clearly flattered by Lester's attention.
That night Lester has another fantasy of a naked Angela. Meanwhile, Jane and Angela sit outside in Angela's car, smoking a joint while Angela talks about how men are always unbelievably attracted to her. The shot transitions to the grainy camera, and it becomes apparent that Ricky is filming the girls. As Jane walks into the house, she realizes that she is being filmed and calls Ricky an asshole, but it is clear that she secretly likes the attention. The next morning, while Jane showers, Lester goes through her address book and finds Angela's number. He calls her, but hangs up in a panic when she answers. Angela uses *69 to call Jane back, and Jane is horrified when she realizes what happened. Meanwhile, next door, Ricky has breakfast with his distant mother and hate-filled father. The doorbell rings, and Colonel Fitts opens it to reveal the two Jims from down the block, who have come bearing a welcome basket. When Colonel Fitts realizes that Jim and Jim are a gay couple he becomes extremely rude, and he makes disparaging comments about them as soon as they leave. Ricky pretends to agree with him, but it is clear to the audience that he is only doing so to prevent his father from attacking him, as well. Outside the high school, Angela tries to impress some fellow classmates with tales of her sexual exploits, but they are merely disgusted. Ricky gets out of his father's car, and Jane points him out to Angela. When Angela learns about the camera incident, she fills Jane in on what she knows about the new boy's sordid past. Ricky comes up and introduces himself to Jane, ignoring Angela. Jane rebuffs him, but Ricky doesn't seem dissuaded.
That night, Ricky sits silently with his parents, watching an army film. Meanwhile, Carolyn drags Lester to a party associated with her work. She forces him to say hello to Buddy Kane, the "Real Estate King", and his wife Christie. Lester, no longer willing to play Carolyn's sidekick as he has so many times in the past, behaves strangely, and Carolyn is clearly embarrassed. Lester retires to the bar to get drunk. Suddenly, Ricky appears. He is working at the party as a waiter, and he invites Lester to go outside and get high with him. When Ricky's boss comes out to chastise him, Ricky calmly quits, inspiring Lester to call the younger boy his "personal hero". Ricky explains to Lester that the catering jobs are just a cover for his job as a drug dealer. Carolyn comes outside, clearly drunk, and tells Lester that she's ready to leave. To Lester's surprise, Ricky introduces himself as a friend of Jane's. When Lester and Carolyn get home, Angela surprises Lester in the kitchen and - to his delight - flirts with him. Upstairs, Angela teases Jane about her father, until she suddenly hears a noise. They look out the window and see that Jane's name has been spelled out on the lawn in fire. Angela stands in the window and starts to pose provocatively for Ricky's camera, but he ignores her, focusing instead on Jane, who sits silently, smiling into a mirror.
Suddenly, Ricky notices that Lester is in the garage. Ricky watches as Lester retrieves some hand weights from the shelves and begins to do arm curls. After a few moments Lester takes off his clothes, and then continues to do arm curls while staring at his naked reflection in the window. Ricky zooms in on Lester's face, but is interrupted by Colonel Fitts knocking on his door, requesting a urine sample. Ricky puts his father off until the next morning, and then takes out a sample from his miniature fridge so that it will warm up overnight - clearly, Ricky has figured out how to get around his father's strict rules. That night, Lester imagines going into the master bathroom to find Angela taking a bath in a tub full of rose petals. Carolyn's gasp of horror wakes him up, and she accuses him of masturbating. He denies it at first, but then tries to get her to have sex with him. When she threatens to divorce him, he shuts her up by reminding her that she would be the one who would have to pay alimony.
The next morning Lester joins the two Jims on their daily run, clearly determined to get in shape. He stops at Ricky's house where, under the guise of borrowing a film, he purchases some pot. He winds up buying a small bag of high-quality marijuana for two thousand dollars. That afternoon, Carolyn goes out into the garden to pick some roses, only to notice Lester in the garage, lifting weights and smoking pot. When she attempts to castigate him for his behavior, he viciously insults her and essentially tells her to support his lifestyle or leave.
Back in Brad Dupree's office, Lester learns that he has been deemed expendable, and is about to be fired. He calmly blackmails Brad into forcing the company to give him a year's pay plus benefits as severance and then leaves, happier than he's been in a long time. Meanwhile, Carolyn meets Buddy Kane, the Real Estate King, for lunch. Buddy tells Carolyn that his wife has just left him. At school, Angela and Jane see Ricky filming a dead bird. Angela makes fun of him and tries to get Jane to participate, but instead Jane decides to walk home with Ricky. Carolyn goes to a motel and has loud, enthusiastic sex with Buddy Kane. As Lester drives home, he sings along to the radio and smokes a joint. He goes to a drive-through and applies for a job at the counter, dismissing the teenaged manager's protests that he has too much experience for the job. As Jane and Ricky walk home, Ricky tells Jane about how he once filmed a dead homeless woman, and how beautiful it was. He introduces Jane to his mother, who barely responds to her presence, then takes her into his father's den to show her Colonel Fitts' Nazi plate. Ricky then takes Jane upstairs to show her the "the most beautiful thing" he's ever shot. The film depicts a plastic bag blowing around with the leaves in front of a red brick wall. As they watch, Ricky tells Jane how these films make him feel: as though sometimes there is just so much beauty in the world that he "can't take it." Jane kisses him, but then startles, realizing how late it is.
Carolyn and Lester have already sat down to dinner when Jane walks in. Lester happily tells Jane about quitting his job and blackmailing his boss. When Carolyn tries to start a fight with him, Lester ignores her. He refuses to let Jane leave the table, and tells the two women that they can no longer ignore his existence. Finally, he throws a plate of asparagus against the wall to emphasize his point, shocking his wife and daughter into silence. He then sits back down and calmly continues to eat. Back in her room, Jane watches Ricky film her through the window. She takes off a flannel shirt, then a t-shirt, then her bra, until she is naked from the waist up. Suddenly, Ricky's door bursts open and his dad begins to hit him, asking him how he got into his study. Ricky gets him to stop by telling him that he only wanted to show his girlfriend the Nazi plate. Confused and perhaps a little chastised, the Colonel stops hitting his son, and finally leaves.
At Buddy Kane's suggestion Carolyn has started going to a shooting range, and has become an extremely good shot. One day, she leaves the range and sings happily all the way home until the sight of a bright red, brand-new car in the driveway silences her. Once inside, she learns that Lester has traded in his respectable Camry for a red 1970 Pontiac Firebird - his dream car. She starts to fight with him, but Lester refuses to take the bait. He meets her anger with flirtation, and is just about to crack her faÃ§ade and make love to her when Carolyn pulls back, fearful that Lester will spill a drink on her expensive couch. Lester yells at Carolyn for her materialism and she runs upstairs, crying. That night, Ricky and Jane sit in Ricky's room. Jane takes the camera from Ricky and asks him about the time he spent in a mental hospital. Ricky then tapes Jane as she lies on the bed and tells him why she hates her father so much, and we realize that we are back in the scene that began the film. Ricky asks Jane if she wants him to kill her father for her. She says yes, but only a few moments later checks to make sure that he understands it was a joke. He says that he does.
Lester begins another day with a run, by now a totally different person than he was only a few months earlier. Back in the house, Jane asks her mother for permission to have Angela sleep over that night. When Lester returns, Jane tells him that his behavior around Angela embarrasses her. Caught off guard, Lester responds with a cutting remark that he regrets as soon as Jane leaves the room. Colonel Fitts, watching as Ricky goes to the car to drive to school with Jane and Carolyn, notices Lester mime "call me" to his son. Suspicious, Colonel Fitts searches Ricky's room, and discovers the tape of Lester standing naked in front of the garage window, doing arm curls. That afternoon, when Lester is at work at Mr. Smiley's, a presumably post-coital Carolyn and Buddy drive up to order some food. Lester hears Carolyn's voice through the intercom and catches the couple making out in the car. Carolyn tries to cover up the incident, but Lester happily informs her of the consequences of her actions. Back in the motel parking lot, Buddy tells Carolyn that they need to cool off for a while. She pretends to understand, but after he leaves she becomes hysterical.
That night, Lester is lifting weights in the garage when he realizes that he's out of marijuana. He calls Ricky, who tells his parents that he's going to see Jane and leaves to deliver some pot to the Burnham residence. Colonel Fitts watches through the window as Lester convinces Ricky to stay and smoke with him, but from the Colonel's vantage point it appears as though Ricky is performing oral sex on Lester. He continues to watch as a car pulls up outside and the two men hurriedly separate. Jane and Angela get out of the car and go inside. In the kitchen, Angela flirts with Lester, but withdraws as soon as he flirts back. Ricky goes to his room to put away the money Lester gave him, but stops when he realizes that his father is there. Colonel Fitts hits him and accuses him of having sex with men for money. Ricky, perhaps wanting to see just how little his father cares about him, tells his father that it's true, that he is indeed prostituting himself. Colonel Fitts throws Ricky out of the house. Ricky goes downstairs, kisses his mother goodbye, and heads over to Jane's. He asks Jane if she'll leave for New York with him right then. Jane agrees, over Angela's strong objections. Ricky shuts Angela up by telling her that she's "ugly and boring and ordinary," and Angela runs out of the room, crying.
In the garage, Lester is doing pull-ups when he sees Colonel Fitts approaching through the pouring rain. He lets the Colonel into the garage, and soon realizes that something is seriously wrong. He tries to comfort Colonel Fitts by telling him about his own wife's affair, commenting that their marriage is "just for show" (and cementing Colonel Fitts' belief that Lester is a homosexual). Out of nowhere, Colonel Fitts kisses Lester. Lester pulls away, telling the Colonel that he must have misunderstood. Colonel Fitts turns and walks off into the rain, leaving Lester standing there.
Carolyn in still in her car. She turns of the self-help tape she has been playing, puts her gun in purse, and tells herself, "I refuse to be a victim" before driving off. From the kitchen, Lester hears a noise. He goes into the living room and finds a tearful Angela sitting on the stairs. She tells him that she and Jane had a fight, but seems to brighten up when Lester compliments her. Lester tells her that he wants her, and she seems willing to participate. Meanwhile, Carolyn is speeding along the wet road, repeating her mantra over and over. Back at the house, Lester starts to undress Angela. Upstairs, Jane and Ricky talk about leaving. Just as Lester takes off Angela's shirt, she tells him she's a virgin, and that she's just been pretending to be sexually advanced. He immediately realizes what he's doing and stops. Angela begins to cry, and Lester wraps her up in a blanket.
Carolyn pulls up in front of the house. In the kitchen, Lester makes Angela some food, and she smiles, saying that she feels better. He asks her how Jane is doing, and she tells him that Jane is really happy. Angela goes to the bathroom, and Lester smiles, seeming truly at peace. Suddenly, a gun appears behind Lester's head. It fires, and Lester slumps forward onto the table, dead. The moment of Lester's death is then repeated several times while Lester, in a voice-over, talks about the things he remembers in the moment just prior to his death, and the audience sees first Ricky and Jane, then Angela, and then Carolyn in the moment that they hear the gunshot. As Lester continues to speak, a blood-spattered and gloved Colonel Fitts rushes into his den and closes the door. As the camera flies high above the neighborhood, Lester tells the audience that he can't be angry about his death, because he is so overwhelmed by all the beauty in the world. He says that although he knows his listeners don't understand what he means quite yet, that they shouldn't worry: someday, they will.