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Plot

Lester Burnham (Spacey) feels his office job has few prospects for advancement and despises his superiors. His wife, Carolyn (Bening), is an ambitious real-estate broker; their 16-year-old daughter, Jane (Birch), abhors her parents, has low self-esteem and is saving money for a breast augmentation operation. The Burnhams' new neighbors are retired United States Marine Corps Colonel Frank Fitts (Cooper), his dissociative wife, Barbara (Janney), and their teenage son, Ricky (Bentley).

After watching a high school basketball game at which Jane is a cheerleader, Lester develops an infatuation with Jane's sexually precocious friend and classmate, Angela Hayes (Suvari). His recurring fantasies entail a sexually aggressive Angela among red rose petals. Frank controls Ricky with a strict disciplinarian lifestyle and gives him regular drug tests. Ricky, a cannabis smoker and drug dealer, evades detection through the use of clean urine samples obtained from a client. Ricky frequently uses a hand-held video camera to record his surroundings and keeps hundreds of taped videos in his bedroom. Carolyn begins an affair with a business rival, Buddy Kane (Peter Gallagher). Lester is informed he is to be laid off, but blackmails his boss, quits his job and takes up low-pressure employment at a fast food chain. He buys his dream car, starts lifting weights and begins running to improve his physique and impress Angela, whom he overheard telling Jane that she would find him sexually attractive if he had muscle. He also takes up smoking cannabis, which he buys from Ricky. Lester continues to fantasize about Angela and flirts with her whenever she visits Jane. The girls' friendship wanes and Jane becomes romantically involved with Ricky; the lovers bond over Ricky's camcorder footage of what he considers the most beautiful imagery he has filmed: a plastic bag blowing in the wind.

Lester discovers Carolyn's infidelity, but reacts indifferently. Buddy breaks off the affair with the excuse that it could lead to a financially ruinous divorce for him. Frank becomes suspicious of Lester and Ricky's friendship and searches his son's room. He finds camcorder footage that Ricky had captured by chance—Lester's lifting weights in his garage while nude. Frank mistakenly concludes that Ricky and Lester are engaged in a sexual relationship after watching their drug rendezvous through the garage window. After Ricky returns home, Frank beats him and accuses him of being gay. Ricky falsely admits the charge and goads Frank into turning him out of their home. Ricky convinces Jane to flee with him to New York City. Angela protests and Ricky answers her vanity by calling her ordinary.

Carolyn loads a gun and drives home. Frank confronts Lester in the garage and attempts to kiss him; Lester rebuffs the advance and Frank flees. Moments later, Lester finds a distraught Angela; she asks him to tell her she is beautiful. He does, and she begins to seduce him. After learning that Angela is a virgin, Lester halts and the pair instead bond over their shared frustrations. Angela tells Lester that Jane is in love, and Lester tells Angela he is happy. While Angela goes to the bathroom, Lester smiles at a family photograph in the kitchen. A gunshot rings out and blood spatters on the wall in front of Lester. Ricky and Jane find him dead. The actions of the other characters in the moments before and after his death are shown: Frank's returning home, bloodied, a gun missing from his collection; Carolyn's crying in their bedroom; Jane, Ricky and Angela reacting to the gunshot. Lester's closing narration explains that despite his death he is happy, as it is hard to be mad when there is so much beauty in the world.