In 1969, Dr. Malcolm Sayer (Robin Williams) is a dedicated and caring physician at a Bronx hospital. After working extensively with the catatonic patients who survived the 1917-1928 encephalitis lethargica epidemic, Sayer discovers that certain stimuli reach beyond the patients' respective catatonic states: Activities such as catching a ball, hearing familiar music, and experiencing human touch all have unique effects on particular patients and offer a glimpse into their worlds. While patient Leonard Lowe (Robert De Niro) proves elusive in this regard, Sayer soon discovers that Lowe is able to communicate with him using a Ouija board.
After attending a lecture on the subject of L-Dopa and its success with Parkinson's sufferers, Sayer believes the drug may offer a breakthrough for his own group of patients. A trial run with Lowe yields astounding results, as he completely "awakens" from his catatonic state; inspiring Sayer to seek funding so that all his patients can receive L-Dopa and experience "awakenings" back to reality.
Meanwhile, Leonard is adjusting to his new life and becomes romantically interested in Paula (Penelope Ann Miller), the daughter of another patient, and begins spending time with her when she comes to the hospital to visit her father. Leonard also begins to chafe at the restrictions on him as an in-patient, desiring the freedom to come and go as he pleases, and stirs up a bit of a revolt in the process of arguing his case repeatedly to Sayer and the hospital administration. Sayer notices that as Leonard grows more agitated while battling administrators and staff about his perceived confinement, a number of facial and body tics are starting to manifest that Leonard has difficulty controlling.
While Sayer and the hospital staff continue to delight in the success of L-Dopa with this group of patients, they soon find that it is a temporary triumph. As the first to "awaken", Leonard is also the first to demonstrate the limited duration of this "awakening": His tics grow more and more prominent, he starts to shuffle more as he walks, and the rest of the patients are forced to witness what will eventually happen to them. He soon begins to suffer full body spasms and can hardly move. However, he puts up well with the pain, and asks Sayer to film him, in hopes that he will someday contribute to research that may eventually help others. Leonard acknowledges sadly what is happening to him and has a last lunch with Paula where he tells her he cannot see her anymore. Leonard and Dr. Sayer reconcile their differences, and Leonard returns to his catatonic state soon thereafter. The other patients' fears are similarly realized as each eventually returns to catatonia no matter how much their L-Dopa dosages are increased.
Sayer tells a group of grant donors to the hospital that although the "awakening" did not last, another such awakening of learning to appreciate and live life took place. The film ends with Sayer standing over the once-again-catatonic Leonard behind a Ouija board, with his hands on Leonard's hands, activating the planchette. "Let's begin," Sayer says.