The film begins with the dramatic yet disastrous opening night of washed-up producer Max Bialystock's latest Broadway venture, Funny Boy: A Musical Version of Hamlet, which unfortunately also marks its closing night. As the audience exits the theater, they can't help but voice their disdain for the show, declaring it a complete failure during a chorus of gasps and complaints about its quality ("Opening Night").
Later, Bialystock's new accountant, Leopold Bloom, arrives to review the financials for Funny Boy. However, his work is interrupted when Hold-Me-Touch-Me (Eileen Essell), one of Max's elderly investors, drops by with a "checkie" and engages in some comical games with Max. During this chaotic meeting, Leo shares his lifelong dream of becoming a producer, but his anxiety is palpable—fueled by his reliance on a blue baby blanket for comfort, which he rubs against his face whenever he feels stressed. When Max unexpectedly snatches the blanket away, Leo descends into hysteria.
Once Leo calms down and examines the show’s dwindling finances, he experiences a breakthrough moment: he realizes that it might be more profitable to produce a flop than a hit, albeit with some legal risks. Encouraged by Bialystock, who sees potential in Leo, they conspire to create the biggest flop in theatrical history and pocket the surplus funds, aiming to escape to Rio de Janeiro ("We Can Do It"). Initially hesitant, Leo returns to Max, unhappy with his mundane accounting job, and fulfills his dream of becoming a producer.
As their partnership, Bialystock & Bloom, takes shape, the duo embarks on the quest for the worst play imaginable and ultimately settle on Springtime for Hitler, a ludicrous musical penned by Neo-Nazi Franz Liebkind. After a humorous and uncomfortable rooftop encounter where Liebkind insists they wear swastika armbands and partake in a mock-sworn oath, they secure the rights to his absurd production. Next, to direct their misadventure, they seek out Roger DeBris (Gary Beach), the most flamboyant director around, who reluctantly agrees to lead the project after hearing about the prospect of a Tony Award.
Amid all this, they encounter Ulla Inga Hansen-Bensen-Yanson-Tallen-Hallen-Svaden-Swanson](/actor/uma-thurman), a stunning aspiring actress. Although they had no auditions lined up, Max allows her to audition and soon hires her as both their secretary and a cast member, after a show-stopping performance of ("When You Got it, Flaunt it").
As the duo scrambles to raise an astonishing two million dollars to finance their project, Max resorts to courting every wealthy old lady he can find to secure the funds ("Along Came Bialy"). Leo finds himself swept up in a budding romance with Ulla, leading him to toss away his comforting blue blanket after sharing a kiss with her.
After a flurry of auditions led by DeBris and his assistant Carmen Ghia (Roger Bart), they reluctantly cast Liebkind as Hitler within the show. As opening night arrives, Leo, sporting the coveted Broadway producer's hat, faces nervous backlash from Max, who believes that even the slightest hint of optimism could doom their production. Amid utter chaos, unforeseen accidents, and a string of catastrophes occur, leading to shocking consequences.
The audience responds poorly at first and begins to leave, but when DeBris takes the stage as a surprisingly over-the-top rendition of Hitler, their production is embraced as a satire rather than an offense. This unexpected twist catches both Max and Leo off-guard, as they watch with bewilderment at the success of the show ("Springtime for Hitler").
Upon returning to their office, a disheartened Bialystock and Bloom realize their scheme has backfired. Just as Leo grabs his blue blanket out of the trash and prepares to confess their crimes, they are interrupted by DeBris and Ghia who rush in to celebrate.
However, chaos reigns again when Liebkind bursts in, furious over what he perceives as treachery, demanding justice for their betrayal of the Siegfried Oath. In the ensuing commotion, the police arrive, leading to arrests and exposing their misdoings, including Bialystock’s tax fraud. Ultimately, Bialystock and Bloom are sentenced to five years in prison, much to the crowd's surprise.
In this time, they produce a musical called Prisoners of Love, which becomes a hit among the inmates and prison staff. Eventually pardoned for uplifting the spirits during their confinement, they bring their new success to Broadway, transforming the ex-prisoners' experience into yet another theatrical spectacle.
Leo finally dons the producer's hat he coveted so long, marking a new chapter as they become successful creators of various blockbuster productions, including A Streetcar Named Murray, South Passaic, Maim, and Katz, solidifying their unique partnership forever.
