Walter Mitty is a negative assets manager at Life magazine living alone in New York City. He chronically daydreams and has a secret crush on Cheryl Melhoff, a coworker. Walter attempts to contact Cheryl via eHarmony but eHarmony customer service agent Todd Mahar explains that Walter's account is not fully filled out: the "been there" and "done that" sections are blank.
Walter works with legendary photojournalist Sean O'Connell, although they have never met in person. At work later that day, Walter receives a negative roll from Sean with a wallet as a gift in appreciation of Walter's work over the years. A letter from Sean explains that he believes negative #25 captures the "quintessence of life" and should be used for the cover of the magazine's final print issue before it becomes exclusively digital, yet the negative is missing from the roll. Ted Hendricks, the obnoxious manager of the magazine's transition, has also heard Sean's recommendation. When he asks about #25, Walter stalls and lies, worried about being fired. Walter then asks Cheryl for help, and she suggests that Walter use the other negatives as clues to Sean's location. He and Hernando, his understudy, are stumped by a negative depicting a curve, until they notice another containing the name of a ship registered in Greenland. Walter reluctantly takes a plane there.
A bartender in Nuuk explains that Sean left on a ship. To find him, Mitty would need to go on the postal helicopter, and the pilot is drunk. Mitty recognizes the pilot's thumb from one of the negatives, and after hesitating, joins the pilot on a trip to bring supplies to the ship. Walter accidentally jumps into ice-cold, shark-infested waters, losing the ship's supplies and preventing radio communication when he finally comes aboard. There, Walter learns that Sean departed the ship a few days earlier and deduces from notes on wrapping paper for a clementine cake Sean left behind that he is heading to Iceland to photograph the volcano Eyjafjallajökull. Walter bikes, skateboards, and runs through the Icelandic countryside to find Sean, but just misses him as the volcano erupts. Dejected, he returns home.
Ted assumes that Walter misplaced the negative and fires him. He tries to visit Cheryl, but spots her ex-husband and leaves before talking to her. Walter visits his mother and throws away the wallet from Sean. To his surprise, Walter recognizes the curve of the piano in his mother's house while looking at the last negative. When asked, she tells Walter that she met Sean and baked him the clementine cake. She had told Walter earlier, but he was daydreaming.
Walter figures out from the notes that Sean is in the Afghan Himalayas and finds him photographing a rare snow leopard. When asked about the negative, Sean explains that, attempting to be playful, he had placed the negative in the wallet. He decides not to tell Walter what the picture actually depicts. When Walter returns to America, the airport security at Los Angeles detains him for arriving from Afghanistan. To verify his identity, Walter calls the only person he knows in Los Angeles: Todd, who has kept in contact during Walter's travels. The two chat and Todd expresses admiration for how adventurous Walter appears.
Walter receives the wallet from his mother, who had retrieved it from the trash, and finally obtains the negative but chooses not to see it. Emboldened, he delivers it to Life's offices and berates Hendricks for disrespecting the staff that made the magazine so honored.
Walter reunites with Cheryl, and thanks her for inspiring him on his journey. Cheryl eagerly asks about his adventures and tells him that her ex-husband had only been at her house to help with repairs. Walking along the street, they see the final print issue on sale at a newsstand, and on its cover, they see the photograph from #25 for the first time: it shows Walter sitting outside of the Life building, examining a contact sheet; the magazine is dedicated to Life's staff, and Sean's note actually referred to "quintessence of Life". Walter and Cheryl continue their walk holding hands.
