The tale begins with investigative journalist Irwin M. Fletcher, portrayed by Chevy Chase, donning an unexpected disguise as a waitress in a Greek restaurant in order to expose a gambling ring. His cover is soon compromised, but he manages to escape unscathed. Upon returning to the office with his story, his boss is pleased, yet refuses to grant Fletch the vacation he had promised, insisting he must complete another assignment first. Frustrated, Fletch receives a surprising call from an attorney in Louisiana informing him that his great aunt has passed away, leaving him her plantation known as Belle Isle. In a moment of impulsiveness, he quits his job, instructing his boss to send his belongings to his new "mansion" in Louisiana.
Upon Fletch's arrival, he meets the charming attorney Amanda Ross (played by Patricia Kalember), who introduces him to the dilapidated plantation that has seen better days. Fletch humorously quips that with "a little spackling and napalm," it could serve as a beautiful mausoleum. While in the house, he encounters the caretaker, Calculus Entropy (Cleavon Little), who reveals his intention to assist Fletcher in maintaining the property. However, Calculus's demeanor hints that he is more than meets the eye.
As Amanda takes Fletch to town to handle some paperwork, she reveals that a buyer is interested in purchasing the plantation for an impressive $225,000. Instinctively suspicious, Fletch refuses to sell. Their professional relationship swiftly evolves into a more personal one, and they spend the night together. Tragedy strikes the next morning when Fletch awakens to find Amanda murdered. The local police, led by a chief with a chip on his shoulder, arrest Fletch—not for the murder, but simply because he irritates him. Fletch finds himself sharing a prison cell with a transvestite necrophiliac named Ben Dover (Randall 'Tex' Cobb). Just as things seem dire, another attorney, Hamilton "Ham" Johnson (portrayed by Hal Holbrook), rescues him by securing his release.
Upon returning to Belle Isle, Fletch converses with Calculus while observing an unexpected visit from the local KKK, who are there on a "contract job" to eliminate the "undesirable carpetbagger"—presumably Fletch. He humorously dons a white sheet and introduces himself as "Henry Himmler," before Calculus chases the group away with a shotgun.
The next day, Fletch is approached by real estate agent Becky Ann Culpepper (Julianne Phillips), who presents a new offer for $250,000 for the plantation, this time from a confidential buyer. Curious, Fletch begins his own investigation, which quickly leads him to find himself disguised as an exterminator at Amanda's house. There he uncovers nefarious connections involving televangelist Jimmy Lee Farnsworth (R. Lee Ermey) and a corporation called "Bluebird." When the police arrive, Fletch cleverly evades trouble by pretending to hunt down "microscopic termites with a taste for human flesh."
Determined to find answers, Fletch attends a live broadcast of the Reverend's show, where he feigns a conversion during an altar call to uncover more about the Reverend's dubious intentions regarding his plantation. While consulting with Ham, he learns about the real nature of Amanda's death; the official ruling states it was of natural causes, but Fletch is not convinced.
Following multiple twists, including a deep dive into the local's troubled past and a risky disguise that nearly exposes him at a biker bar, Fletcher uncovers that the Reverend's true ambitions are much larger than anticipated and that he is linked to the Everest Development corporation—which has interests in the neighboring plantations as well.
As the stakes rise, with Fletch dodging threats on multiple fronts, he finally corners Ham with evidence of his misdeeds. In a climactic confrontation, Fletch uses clever tactics to escape harm while ensuring justice for Amanda's untimely demise. Ultimately, the police swoop in, revealing that Calculus is actually an undercover FBI agent, and they have been on the Reverend's case for quite some time.
Returning to California, Fletch finds himself celebrated for his investigative work, despite the chaos that unfolded. He also learns that he has received a hefty insurance payout for the destruction of Belle Isle, yet it leads to a comical twist concerning his ex-wife's claim to half of the property, utterly transformed into a toxic wasteland. Fletch smiles broadly as he wields laughter amidst the absurdity of it all.
