During the early 1950s, Peter Appleton, portrayed by Jim Carrey, is a promising young screenwriter whose life takes a dramatic turn. After being accused of being a Communist due to his attendance at an anti-war meeting in college—an event he insists he attended solely to impress a girl—his promising career is shattered. In the blink of an eye, his upcoming film is delayed, another writer takes credit for his work, his movie star girlfriend leaves him, and he finds himself without a studio contract.
In a downward spiral fueled by despair, Peter gets drunk and inadvertently drives off a bridge while attempting to avoid an opossum. Upon regaining consciousness, he has lost his memory and finds himself in the quaint town of Lawson, where he is rescued by Stan Keller (James Whitmore) and brought to the local physician, Doc Stanton (David Ogden Stiers). The townspeople mistakenly identify him as Luke Trimble, a local boy who was killed in World War II nine years earlier, and they welcome him back with open arms, viewing him as a beacon of hope. Although initially hesitant to assume this new identity, “Luke” gradually adapts to his perceived past life. Surrounded by his “father” Harry portrayed by Martin Landau, and his “girlfriend” Adele Stanton (Laurie Holden), he embarks on a mission to breathe new life into The Majestic theater, a struggling old movie house that had closed its doors amidst hardship.
Meanwhile, in Washington, D.C., Congressional committee member Elvin Clyde (Bob Balaban) suspects that Appleton’s disappearance is indicative of his supposed Communist affiliations. Unbeknownst to Hollywood, Clyde dispatches two federal agents to track him down. Back in Lawson, not everyone is convinced that “Luke” is truly back. Bob Leffert (Karl Bury), a one-armed soldier with a history with the real Luke, doubts Peter’s claims and fears that this impostor is only setting the town up for more heartbreak.
A few days later, the town throws a much-anticipated welcome home celebration for “Luke,” led by Mayor Ernie Cole (Jeffrey DeMunn). During the festivities, the townsfolk encourage him to showcase his piano skills from his youth. Yet, instead of playing a classical piece, he unexpectedly breaks into a lively roadhouse boogie tune. However, a confrontation with Bob later that evening reveals underlying tensions and doubts about his identity. Despite these challenges, Peter, along with Harry, Adele, and their neighbors, successfully restores The Majestic. They even manage to unite the town in unveiling a memorial commissioned by President Franklin D. Roosevelt after the war, a tribute that had long been delayed.
The turning point arrives when The Majestic screens a film Peter had written, titled "Sand Pirates of the Sahara." As this moment unfolds, Peter begins to regain fragments of his memory. Simultaneously, Harry suffers a heart attack which leaves him with limited time. In his dying moments, Peter opts to let Harry believe he is truly his son.
Soon after the funeral, Peter confesses to Adele that he is not Luke. The truth comes to light when federal agents Ellerby (Daniel von Bargen) and Saunders (Shawn Doyle) publicly confront him after local boys discover his car washed ashore. Sheriff Cecil Coleman (Brent Briscoe) inquires if he can assist the agents, leading to a summons for Peter to appear before Congress.
On the night of the hearing, Peter’s agent suggests he denounce his past associations with the Communist Party to clear his name. Although he initially contemplates this route, a confrontation with Adele and a poignant letter from the real Luke spurs him to take a stand before the committee. During the televised hearing, led by Congressman Doyle (Hal Holbrook), Peter delivers a heartfelt address on true American values, winning the support of viewers both in the committee room and in Lawson. Fearing backlash, the lawmakers ultimately decide to release him.
Peter learns that it was the girl he had pursued at the college meeting who had implicated him to the committee, and she has since become a producer for Studio One. With trepidation, he returns to Lawson, expecting hostility. To his astonishment, he is met with a hero’s welcome from the townspeople, who have come to appreciate him for who he is. In a concluding epilogue, Peter finds solace in Lawson, marries Adele, and they joyously welcome their first child into the world.
