Andy Kaufman's (Jim Carrey) "foreign man" character appears in black and white, declaring that (due to massive editing), this is actually the end of the film, not the beginning. He plays a phonograph record alongside the credits before walking somberly off. Kaufman then comes back, and, in his normal voice, claiming he "had to get rid of the people who don't understand me, and don't want to try," he proceeds to show the story of his life on a film projector, starting with his childhood home in Great Neck, New York, circa 1957.
Kaufman is a struggling performer whose act fails in nightclubs because, while the audience wants comedy, he sings children's songs and refuses to tell conventional jokes. As the audience begins to believe that Kaufman may have no real talent, his peculiar "foreign man" puts on a rhinestone jacket and does a dead-on Elvis impersonation and song. The audience bursts into applause, realizing Kaufman had tricked them.
He catches the eye of talent agent George Shapiro (Danny DeVito), who signs Kaufman as a client and immediately lands him a network TV series, Taxi, much to Kaufman's dismay, since he dislikes sitcoms. Because of the money, visibility, and promise that he can do his own television special, Kaufman accepts the role on Taxi, turning his foreign man into a mechanic named Latka Gravas. He secretly hates doing the show, however, and expresses a desire to quit.
Invited to catch a different act at a nightclub, Shapiro witnesses a performance from a rude, loud-mouthed lounge singer, Tony Clifton, whom Andy wants to guest-star on Taxi. Clifton's bad attitude is matched by his horrible appearance and demeanor. But backstage, when he meets Shapiro in person, Clifton takes off his sunglasses and reveals that he is actually Kaufman. Clifton is a "villain character" created by Kaufman and his creative partner, Bob Zmuda (Paul Giamatti). Once again, the gag is on the audience.
Kaufman's fame increases with his Saturday Night Live appearances, but he has problems with his new-found fame. When he travels to college campuses, audiences dislike his strange sense of humor and demand that he perform as Latka, so he deliberately antagonizes them by reading The Great Gatsby aloud from start to finish. Kaufman shows up on the Taxi set as Clifton and proceeds to cause chaos until he is removed from the studio lot. He relates to Shapiro that he never knows exactly how to entertain an audience "short of faking my own death or setting the theater on fire."
Kaufman decides to become a professional wrestler but to emphasize the "villain" angle, he would wrestle only women (hired actresses) and then berate them after winning, declaring himself "Inter-Gender Wrestling Champion." He becomes smitten with one woman he wrestles, Lynne Margulies (Courtney Love), and they begin a romantic relationship.
Problems arise when an appearance on a live TV comedy show, ABC's Fridays, turns into a fiasco when Kaufman refuses to speak his lines. Also, the wrestling Kaufman enjoys getting a rise out of the crowds and feuds publicly with Jerry Lawler, a professional male wrestler, who challenges Kaufman to a "real" wrestling match, which Kaufman accepts. Lawler easily overpowers and seriously injures Kaufman, resulting in the comedian wearing a neck brace. Lawler and an injured Kaufman appear on NBC's Late Night with David Letterman, theoretically to call a truce, but Lawler insults Kaufman, who throws a drink at the wrestler and spews a vicious tirade of epithets. It is later revealed, however, that Kaufman and Lawler were in fact good friends, and staged the entire feud, but despite this, Andy pays a price when he is banned from Saturday Night Live by a vote of audience members, weary of his wrestling antics. Shapiro advises Kaufman and Lawler not to work together again, and later calls Kaufman to inform him that Taxi has been canceled.
After a show at a comedy club, Kaufman calls together Lynne, Zmuda, and Shapiro to disclose that he has been diagnosed with a rare form of lung cancer and may die soon. They aren't sure whether to believe this, thinking it could be yet another Kaufman stunt, with Zmuda actually believing a fake death would be a fantastic prank. With a short time to live, Kaufman gets a booking at Carnegie Hall, his dream venue. The performance is a memorable success, culminating with Kaufman inviting the entire audience out for milk and cookies. His health deteriorates. Desperate, he heads to the Philippines to seek a medical "miracle" (actually psychic surgery), where doctors supposedly pull out infected organs from the body; he discovers the scam and laughs at the irony. He dies soon after. Friends and loved ones do a sing-along with a video of Andy at his funeral.
One year later, in 1985, Tony Clifton appears at Andy Kaufman's tribute at The Comedy Store's main stage performing, "I Will Survive." The camera pans over the crowd and reveals Zmuda in the audience. During the final credits, Kaufman briefly peeks in black-and-white again.
Output: Who was Tony Clifton?