A narrator with a Texan accent gives viewers an intriguing glimpse into the life of the shadowy Denton TV executive, Farley Flavors. Despite his fast-paced existence, Flavors feels a profound emptiness due to yearning for a particular woman who is unattainable. Observing from his office, he watches as his television studio spreads throughout the town of Denton, transforming its former inhabitants into enthusiastic audience members of a 24-hour live reality show called Overture. However, one figure stands out amid the joyous atmosphere: the neurotic Brad Majors, who struggles with the sudden transformation of his hometown, despite his wife Janet's assurances that it's all for the best.
As the audience settles in for the show, they are greeted by a welcoming committee composed of local reporter and filmmaker Neely Pritt, who highlights Denton's so-called virtues in a segment titled Denton, U.S.A.. In a surprising twist, Brad and Janet find themselves contestants on a dubious game show, "Marriage Maze," where the stakes appear to involve a one-way ticket to Denton's mental health facility, Dentonvale. Janet faces a choice when host Bert Schnick, a supposed blind Austrian, assures her that committing Brad will strengthen their marriage. Torn, Janet ultimately opts to send Brad to Dentonvale, leading to the catchy tune Bitchin' in the Kitchen.
Upon their arrival at Dentonvale, they encounter an eccentric staff that includes Nurse Ansalong and her boyfriend Ricky, as well as the supervisors—alarming siblings Dr. Cosmo McKinley and Nation McKinley. Despite Brad's vigorous objections, Cosmo cruelly has him sedated, bound, and tossed into the disconcerting "Terminal Ward." Janet is hesitantly delayed from signing the commitment papers by Nurse Ansalong, who advises her to reconsider her choice.
Meanwhile, in a peculiar twist of fate, Janet's parents, Emily and Harry Weiss, are roped into the chaos of "Marriage Maze" and offered a vacation home in exchange for diagnosing Brad—a decision they make after declaring he’s regressing. Janet later expresses her frustration to her father, who criticizes her choice in marrying an orphan, while she reminds him that the man he had wanted for her turned out to be gay, culminating in the song Thank God I'm a Man.
Within Dentonvale, the McKinleys are shocked to discover that their show has been commandeered by Flavors' fast food company, "Five Flavors," under the guise of a pop psychology movement. With ambitions of exploiting Janet as "Miss Mental Health," they lure her into their plans, despite her initial attempts to reconnect with Brad through her newfound fame, showcased in Lullaby.
Meanwhile, intrepid news presenters Judge Wright and Betty Hapschatt from "Denton Dossier" begin to suspect that Flavors and the McKinleys harbor sinister intentions. Their investigation is thwarted when they are replaced on the news show by a new co-anchor, intensifying the eerie atmosphere surrounding Denton.
As tensions rise, Janet's transformation into a media darling spirals out of control, leading to tumultuous revelations about her relationship with Brad in a surreal dream sequence, highlighted by the song Looking for Trade. With DTV's new reality show, "Faith Factory," looming, the staff, including Bert and the Weiss family, prepare for their television debut donning nurse and doctor uniforms to present themselves as credible.
In a shocking turn of events, Betty uncovers the truth behind the facade of "Dentonvale," while Judge Wright, based on verbatim accounts from Brad, intervenes to rescue him from the plight orchestrated by Farley. The rescue culminates in a confrontation where Brad learns the twisted familial connection to Farley, resulting in a dramatic showdown underscored by the song Duel Duet.
Declaring their independence, Brad, Janet, Wright, and Betty resolve to escape the clutches of Denton’s sinister reality show by hotwiring a car, symbolizing their defiance against the manipulative world around them, reinforced in the song Anyhow Anyhow. The story concludes with them betraying societal expectations, while the staff of Dentonvale revel in the disaster of unloosing the town upon its fate as part of Farley's grotesque television program, as echoed in Denton, U.S.A. Reprise.
