Michael (John Travolta) is not a stereotypical archangel. He epitomizes the freedom that an angel might command if living among mere mortals. As the tagline says, "He's an angel, not a saint."
Two reporters, Frank Quinlan (William Hurt) and Huey Driscoll (Robert Pastorelli), one cynical and the other innocent, work for a tabloid newspaper in Chicago. ("Quinlan" is a nod to one of the writers of the same name.) They travel to a sleepy hamlet in Iowa because Quinlan has received a letter from a woman, Pansy Milbank, (Jean Stapleton) who has an angel for tenant and he is able to convince his editor (Bob Hoskins) that they should visit her at the Milk Bottle Motel. She dies before their very eyes, and they "persuade" Michael to accompany them to Chicago. Traveling with them is an alleged angel expert, Dorothy Winters (Andie MacDowell) with whom they were saddled by their editor.
Michael is in control of the entire trip. They stop when he says so because he causes their tire to go flat. He leads them in a fight in a bar for which they are jailed one night. And he resurrects the dog, Sparky, after it is runover by a truck.
Throughout the story, there is romantic tension between the angel expert and Quinlan, the cynical reporter and Michael engineers their romance to the very end.
The movie's climax comes when they finally arrive in Chicago and Michael breathes his last looking up at the Sears Tower. (Michael has a fascination for the biggest and tallest things in the world.) Michael wasn't dying; but he was exiting earth for his last time. Meanwhile, the angel expert is exposed as a spy for the manipulative editor, and she confesses that she was after Huey's job. In truth, she is a dog expert who was sent on the trip to befriend Sparky. Quinlan, who at one point was moving out of his cynicism, regresses and the story almost ends with the three traveling companions going their separate ways, knowing they had journeyed with an angel, but not understanding exactly what it meant.
Finally, one night, Quinlan spots a figure that he thinks is Michael (who was lying about it being his last visit), and begins following him rapidly through the streets. He rounds one corner and careens into Dorothy, who apparently was following a Michael-clone herself. Their faith is restored, and their love blossoms once more. "Marry me, Dorothy," says Quinlan. "Yes," she replies. Then the scene freezes, and out pop Michael and Pansy Milbank -- we're left to ponder whether she became an angel when she died earlier, or that she was an angel all along -- and they dance through the frozen people until they merge with the light emanating from a car's headlights.