Ted Kramer, played by Dustin Hoffman, is a dedicated advertising executive who is delighted to share his recent promotion as the creative director with his wife, Meryl Streep. However, his world turns upside down when she announces her decision to leave him and their young son, Billy. Joanna takes $2000 from their savings, the amount she brought into the marriage, demonstrating her resolve to leave. Despite Ted's desperate attempts to persuade her to stay, Joanna is unwavering.
As the days unfold, both Ted and Billy struggle with their new reality. Ted, absorbed in his heavy workload, finds it increasingly difficult to connect with Billy, who longs for his mother's affection. The father-son duo is initially at odds, as Ted attempts to juggle his job responsibilities while Billy copes with the absence of his mother. Ted's inexperience in managing household routines becomes evident when he makes a mess while trying to prepare breakfast for Billy, resulting in burnt hands and a chaotic morning.
In the workplace, Ted's boss, Jim O'Connor, expresses concern over Ted's distractions but insists he remain focused on his demanding new account. Ted promises to manage both his work and parenting, but challenges arise, particularly when Billy unintentionally ruins his work with a spilled drink. As they venture out for groceries, Ted starts dismantling the family pictures that remind him of Joanna, leaving only one for Billy's room which he reluctantly keeps.
Despite the initial turmoil, the bond between Ted and Billy gradually strengthens. Ted implements rules about screen time and healthy eating, asserting his role as a responsible father while learning to navigate the challenges of single parenthood. Ted’s attendance at Billy's school events reflects his commitment, even as he finds himself entangled in a relationship with a co-worker, Phyllis Bernard.
His friendship with neighbor Margaret, a fellow single parent, blossoms as they share their challenges and support one another through their new lives. Tragedy strikes when Billy suffers an injury at the park, prompting Ted to rush him to the hospital, deepening their connection through shared experiences.
The situation escalates when Joanna returns from California, seeking custody of Billy, igniting a fierce legal battle that tests both parents. Ted's financial strain grows as he hires a lawyer, who urges him to secure employment to bolster his case. During the contentious custody hearing, both Ted and Joanna face intense scrutiny from their legal representatives. Joanna's past and present are laid bare, and damaging evidence regarding Ted’s job loss due to his parenting commitments emerges.
The court ultimately awards custody to Joanna, citing the tender years doctrine, leaving Ted heartbroken but aware that contesting the decision could put Billy through emotional turmoil. In a poignant final morning together, Ted prepares breakfast with Billy, a bittersweet echo of their earlier struggles. When Joanna arrives to take Billy, she reveals her true feelings for him, ultimately deciding not to take custody, acknowledging that his true home is with Ted. As she steps into the elevator, there's a moment of painful nostalgia, where Ted reassures her with a simple affirmation, “Terrific.”
