John Arnold DeMarco, clad in full Zorro regalia, steps into the spotlight as Don Juan, a vibrant 21-year-old brimming with dramatic flair. In a moment of despair, he contemplates taking his life on a billboard, but is rescued by psychiatrist Jack Mickler, who adopts the persona of Don Octavio de Flores to prevent this tragedy. Subsequently, John finds himself confined at a mental institution for observation, where Mickler, nearing retirement, decides to perform an extensive evaluation without resorting to sedatives.
As Mickler listens to John's fantastical tales, still embodying the charming Don Octavio, he becomes aware of several discrepancies, such as John's distinct Castilian accent. Regardless, Mickler plays along with John's stories, allowing himself to be swept away by the youth's spirited enthusiasm.
Meanwhile, back in his mundane life, Mickler's daily routine with his wife Marilyn feels dull in comparison. However, John's presence at the hospital has a surprising impact on the staff; it distracts the women and even prompts a male attendant to showcase his dancing skills on the lawn. This newfound energy inspires Mickler to revisit his love for opera and reignite the passion in his marriage.
As their conversations unfold, Mickler finds himself increasingly entangled in John's narrative, even while questioning the authenticity of the young man's claims. John's grandmother arrives, providing a stark contrast to John's grand tales: he actually hails from Phoenix, Arizona, and tragically lost his father in a car crash. John vehemently dismisses her revelations, accusing her of sharing the same cruelty displayed by his mother, whom he insists is now a nun.
Mickler, undeterred, shares a poignant story about another young man who longed to connect with a woman he admired but faced a harsh rejection that led him to attempt suicide. This story strikes a chord with John, evoking a visceral reaction and violent anger at the mention of such despair.
As John's evaluation deadline draws closer, Mickler feels the weight of expectations to recommend the youth's indefinite confinement—an outcome he is growing increasingly uncomfortable with. The enigmatic circumstances surrounding John's mother, currently a nun, add to the mounting intrigue. In their final session, Mickler probes deep into John's feelings, hinting at possible infidelities of his mother, which provokes an explosive response from John.
As the finale approaches, it becomes evident that John's existence has been a tapestry woven with intense passions and heartaches. After enduring two challenging years in a luxurious harem as the cherished of the Sultaness, he believed he found his true love in Doña Ana, only to face cruel rejection on a picturesque Greek island. In a profound twist, Mickler concludes that John truly embodies Don Juan DeMarco, the most legendary lover known to mankind. When John questions Mickler's own identity, the seasoned psychiatrist reveals himself as Don Octavio de Flores, claiming that his various personas were merely disguises that John has expertly dismantled.
As their transformative journey approaches its end, Mickler successfully persuades John to confront reality by taking his medication and gently clarifying that not everyone perceives him as Don Juan. Before Mickler's retirement, he facilitates a crucial meeting between John and the board, where John, dressed casually and speaking with an American accent, narrates his true life story: born in Queens, facing familial loss, and grappling with the truth of his mother's unfaithfulness. Armed with this clarity, John is finally set free from his fantasies, ready to pursue a fresh start in life, accompanied by Mickler and the doctor's wife, as they embark on a journey to the remote Greek island where Don Juan first met his one true love.
