The film begins during a thunderstorm, where flashes of lightning reveal a spooky old house echoing with the haunting sounds of a Theremin. Inside, a coffin springs open, and out sits Criswell. This moment bears a striking resemblance to the opening of Night of the Ghouls, and Criswell's commentary closely mirrors that of Plan 9 from Outer Space. Following this, credits roll over tombstones bearing the names of the cast, reminiscent of Plan 9. The camera sweeps from the iconic Hollywood sign down to the heart of Hollywood on a rainy night in the early 1950s.
Outside a run-down theater, the quirky theater director Edward D. Wood Jr. (Johnny Depp) anxiously awaits the press for a review of his play, The Casual Company, a military drama set during World War II. However, the performance is met with disappointingly empty seats. Later, Ed, his close friend John "Bunny" Breckinridge (played by Bill Murray), and the three main cast members- Dolores Fuller (Sarah Jessica Parker), Paul Marco (Max Casella), and Conrad "Connie" Brooks (Brent Hinkley)- gather to read a scathing review by Victor Crowley, which critiques everything except the realistic costumes. Despite the onslaught of negativity, Ed tries to uplift the spirits of his team, clinging to that one positive remark. Yet, that night, as he lies in bed with Dolores, who makes a quip about her missing clothes, Ed is overwhelmed by self-doubt regarding his future in filmmaking, particularly as he approaches thirty years old. He laments the fact that his idol, Orson Welles, achieved fame with Citizen Kane at just 26.
Days later, while working in the props department at a film studio, Ed is asked to deliver a potted palm to the executive offices. Seizing the moment, he conveniently views stock footage that he believes he could craft into an entire movie. While there, he overhears office girls discussing an article in Variety about a biographical film on sex change icon Christine Jorgensen. Eager to direct, Ed calls George Weiss (Mike Starr), head of Screen Classics, a studio known for soft-core films, boasting he is the perfect director for the project. Dolores, overhearing his confidence, questions how he fits the bill, but Ed dismissively calls it a ploy to attract Weiss's interest.
Later, when visiting Weiss, Ed learns that the Christine Jorgensen project has fallen through, but a new sex-change film titled I Changed My Sex is in the works. With no script or director, Ed sees an opportunity and pitches himself for both roles. Under pressure, he reveals his secret: he's a transvestite. Although he clarifies that he is straight and cross-dresses for personal comfort, Weiss doubts his qualifications, needing someone experienced to produce a profitable film on a tight deadline.
On his way home, Ed unexpectedly meets his long-time idol, Bela Lugosi (Martin Landau), leaving a funeral home. Their conversation allows Bela to express his frustrations with life, hinting at his imminent death, but sparks a strong friendship as Ed drives him home. Bela hasn’t worked in four years, and a colleague openly criticizes him as a "washed-out junkie," prompting Ed to think about offering him a role.
On Halloween night, the two watch White Zombie together at Bela's house. During commercial breaks, Bela becomes disheartened as a host admires his prior work but dismisses it as irrelevant among newer faces. Ed cheers him up, leading to a delightful yet chaotic Halloween as Bela engages children by channeling his iconic Dracula character.
With the promise of giving Bela a starring role for little cost, Ed convinces Weiss to let him create the film, finishing the script in just two days. He presents it to Dolores, using the moment to come out about his cross-dressing by showcasing himself in her clothes. An explosion of anger ensues as Dolores feels betrayed, yet Ed persuades her to play in the movie as Barbara.
Upon presenting his script to Weiss, a clash erupts over Glen or Glenda, which diverges significantly from Weiss's original intent for the story. Despite their disagreements, Weiss concedes Ed can proceed, provided he meets the film's required length. Filming commences, with Ed taking on dual roles.
Filming encounters numerous hurdles; including one where Bela's discomfort escalates when a crew member casually brings up his rival Boris Karloff. Ed’s calm demeanor soothes Bela, and shooting resumes, albeit with internal turbulence as Dolores struggles to accept Ed's cross-dressing onscreen. After a tumultuous journey, the film concludes production.
As Ed seeks funding for future projects, he faces rejection, with Glen or Glenda failing to attract any local screenings, leading to a call with a furious Weiss, who berates Ed’s film as a “piece of shit.” A wrestling event later piques Ed’s interest in Tor Johnson (George 'The Animal' Steele) as a potential actor for future films.
Months pass, and Ed finds Bela desperate and financially crippled. He assures Bela of his support, despite lack of funds, and they attempt to create stock footage for Ed’s next venture. The movie, now titled Bride of the Monster, faces lost investments and disappointing responses as Ed juggles passion with obligations that lead to a rift with Dolores.
Amidst further struggles, he meets Kathy O'Hara (Patricia Arquette) at the hospital; her sweet demeanor captures his attention. Ed divulges his secret quirks during an outing, and she accepts him wholly. As their relationship blooms, bad news about Bela's hospital stay prompts Ed's desperate attempts to help him.
Ed's aspirations take a complex turn as financial backing from J. Edward Reynolds (Clive Rosengren) arrives with conditions, including a baptism requirement and a revised script. As parts of the film fall into chaos, Ed's resolve to maintain creative autonomy strengthens, culminating in opportunities to reclaim his ambitions despite external pressures.
On opening night in 1959, as rain begins to fall, Ed introduces his labor of love, Plan 9 from Outer Space, simply stating, "For Bela." The film runs, and Ed’s heart swells with pride as he plays back the dialogue in silence, hoping this undertaking will be his legacy. As Plan 9 draws to a close, Ed proposes to Kathy, and they make plans to marry in Las Vegas, with the camera pulling away to reflect on the Hollywood sign once more.
The film concludes with reflections on Ed's enduring struggle in the industry as he eventually fades into obscurity, facing lifelong battles with alcoholism. Although he passed away in 1978 at 54, the world eventually recognized his unique vision, dubbing him "The Worst Director of All Time," igniting a newfound appreciation for his work in later years.
