High school student Danny Noonan, portrayed with a relatable angst by Bill Murray, grapples with the dual pressures of aspiring for a higher education while facing the harsh reality of a seemingly dead-end job. He finds himself in the upscale world of Bushwood country club as a caddie, catering to the whims of the wealthy elite. As Danny navigates the complexities of this privileged social fabric, he stands between two strong influences: the carefree and charismatic Ty Webb, played with unassuming charm by Chevy Chase, and the pompous Judge Elihu Smails, portrayed with an air of snootiness by Rodney Dangerfield, the club's co-founder and director of the coveted caddie college scholarship program. Adding to the chaos is the frantic Carl Spackler, whose manic energy and obsession with eliminating a pesky gopher wreak havoc on the golf course, thanks to the interference of the irritating Al Czervik.
As the summer unfolds, Danny desires to impress Smails and steps up to caddie for him, hoping to gain his respect. However, this decision sets off a cascade of misadventures when Czervik's obnoxious behavior leads to a humorous incident that results in Smails throwing his putter in frustration, accidentally striking an elderly club member. In a surprising act of valor, Danny takes the blame, aiming to win favor with Smails.
The narrative thickens as the club's festive Fourth of July celebration approaches, where Danny, alongside his charming girlfriend Maggie, is caught in the web of burgeoning attractions, particularly with Smails’s alluring niece Lacey Underall, who has already caught the attention of Webb. As Danny becomes enchanted by Lacey, he finds himself embroiled in a world filled with secrets and possible betrayals, complicating his life further.
Amidst the unfolding drama, Danny rises to prominence by winning the Caddie Day golf tournament, earning an invitation to Smails’s boat christening event at the nearby Rolling Lakes Yacht Club. This leads to an unexpected romantic encounter with Lacey, yet their passionate night together is cut short when Smails discovers them, leading to a furious confrontation that sends Danny scrambling for safety.
Caught in a moral quagmire, Smails presses Danny to keep the incident secret in exchange for scholarship approval, forcing him to weigh his aspirations against his principles. With Czervik's antics increasingly infuriating Smails, tensions heighten at the club, culminating in Smails declaring Czervik unwelcome. In retaliation, Czervik proposes a riveting high-stakes golf match against Smails and his partner, Dr. Beeper, with a $40,000 prize on the line. Unexpectedly, Webb aligns with Czervik, further ruffling Smails and revealing personal quips about family history.
As the game commences, the heat on the course intensifies, with club members and staff keenly observing the thrilling standoff. The match brings forth a test of nerves as Czervik boldly raises the betting stakes to $80,000. When fate throws a wrench in the mix, Czervik feigns injury, leading to Danny's reluctant selection as a replacement just as Smails threatens to revoke his scholarship.
The climax draws near as the contest heads for a nail-biting finale, and the score remains tied. With a crucial putt on the line, Czervik ups the ante, offering double or nothing for Danny if he can sink the shot. Just as Danny's chances seem bleak, Carl’s latest attempt to eliminate the troublesome gopher culminates in an unexpected explosion that inadvertently sends the ball into the hole, securing victory for Danny, Webb, and Czervik.
In the end, Czervik ensures Smails pays his part of the wager, thus funding Danny's college plans. As the drama subsides, the gopher re-emerges unscathed, dancing humorously to Kenny Loggins' "I'm Alright," providing a whimsical touch to the story that lightens the chaos.
