At William Bloom’s wedding party, his father Edward recalls the day Will was born, claiming he caught an enormous catfish using his wedding ring as bait. Will, having heard these stories all his life, believes them to be lies and falls out with his father. Three years later, Edward is stricken with cancer, so Will and his pregnant French wife Joséphine spend time with his father in Will's childhood home in Alabama.
Edward’s life is told through flashbacks, beginning with his encounter with a witch in his hometown, Ashton. She shows him his death, which doesn't faze him. As he grows into adulthood, he finds his home too confining, and sets out into the world with a misunderstood giant, Karl, who is part of a traveling circus.
Edward and Karl find a fork in the road and travel down separate paths. Edward follows a path through a swamp and discovers the secret town of Spectre. There, he befriends Ashton poet Norther Winslow, and the mayor’s daughter Jenny. Unwilling to settle down, Edward leaves Spectre but promises Jenny he will return.
At Joséphine's request, the bed-ridden Edward tells her how he met his wife Sandra, with Will listening outside the door. Returning to his reminisces, Edward reunites with Karl and they visit the Calloway Circus, where Edward falls in love with a beautiful woman. Karl and Edward get jobs in the circus where the ringmaster Amos Calloway reveals to Edward one detail about the woman at the end of every month.
Three years later, Edward discovers that Amos is a werewolf but shows no ill will towards his employer. In gratitude, Amos reveals the woman's name as Sandra Templeton, who attends Auburn University. Edward confesses his love to Sandra, but she turns him down despite numerous romantic gestures. He learns she is engaged to Don Price, a fellow Ashton citizen. Don beats Edward in a fight, prompting Sandra to break off their engagement and marry Edward.
Shortly after, Edward is conscripted into the army and fights in the Korean War. He parachutes into the middle of a North Korean military show, steals important documents, and convinces Siamese twins Ping and Jing to help him escape in exchange for making them celebrities. Upon returning home, Edward becomes a traveling salesman and crosses paths with Winslow, unwittingly helping him rob a failing bank, inspiring the poet to work on Wall Street.
In the present, Will investigates the truth behind his father’s tales and travels to Spectre. He meets an older Jenny, who explains that Edward rescued the town from bankruptcy and rebuilt it with help from his friends from Calloway Circus. Refuting Will's suspicion that she had an affair with his father, Jenny reveals while she loved Edward, he remained loyal to Sandra.
Will returns home but learns Edward has had a stroke and stays with him at the hospital. Edward wakes up but, unable to speak much, asks Will to narrate how his life ends. Though struggling, Will tells his father of their imagined daring escape from the hospital to the nearby lake, where everyone from Edward’s past is there to see him off. Will takes Edward into the river, where he transforms into a giant catfish and swims away. A satisfied Edward dies, knowing Will finally understands his love for storytelling.
At the funeral, Will and Joséphine are surprised when all the people from Edward’s stories come to the service, though each one is a slightly less fantastical version than described. Finally understanding his father’s love for life, Will passes on Edward’s stories to his son.
