Lance Perkins (Eddie Murphy) is hosting an exercise program on TV for overweight people. Professor Sherman Klump (also Eddie Murphy), a kindly, well-liked, brilliant professor of genetics, gets ready for work. Meanwhile, 5,000 hamsters are overrunning Wellman College and causing general chaos. It turns out that these are the school's laboratory hamsters that 400-pound Sherman accidentally released the night before. The problem having been contained, Sherman is given an update by his assistant, Jason (John Ales), about their latest project an experimental formula that reconstructs the DNA of an obese person to make weight-loss easy. It seems that their fattest hamster, Shelley, has lost 3 ounces, proving that the serum works. Jason suggests increasing the amount Shelley is fed, but the ever-kindly Sherman argues against it, saying it could be dangerous.
He then has an unpleasant meeting with Dean Richmond (Larry Miller). The Dean tells him that the incident with the hamsters has cost the science department most of its funding. Harlan Hartley (James Coburn) is the school's last remaining wealthy alumnus and is planning to award a $10 million grant to the college; Klump is warned not to alienate him as well.
After class, Sherman meets and instantly falls in love with the lovely Miss Carla Purty (Jada Pinkett), a chemistry graduate student teaching a class across the hall, who is a big fan of his work. Later that night, Sherman dines with his portly family (most of whom are also played by Murphy) and argues with them about obesity. Cletus, his ravenous father, starts his habit of randomly passing gas. Treating this disgraceful procedure religiously, he breaks wind to the point where he has soiled himself (6 times). Sherman is hurt by the comments his father, Cletus, makes, but Sherman's mother, Anna, tells him that he is "beautiful inside and out," prompting Sherman to attempt to ask Carla out on a date, which she accepts.
While watching Lance Perkins on TV giving one his speeches of motivation, Sherman falls asleep and dreams he is making out with Carla on a beach, but she gets buried in the sand by his weight. Sherman awakens to Perkins telling the viewers to get up and tell themselves "Yes I can!", which Sherman does. Now Sherman is motivated, full of energy, and is determined to lose some weight. A Rocky-style montage ensues, showing Sherman trying various methods to get fit before the big date. However, although the date begins well with Carla showing great admiration for Sherman's work with Shelley, it turns into a disaster when Sherman falls victim to the evening's star entertainer, an insult comic called Reggie Warrington (Dave Chappelle), who heckles him with cruel jokes about his obesity. Back at Carla's home with tears in his eyes, a deeply hurt and humiliated Sherman says goodbye to his date. Carla says that it shouldn't matter what the comic said as Sherman is a "brilliant man." Sherman tells her to have a pleasant evening and shakes her hand.
Later that night, alone and depressed at home, Sherman stuffs himself with junk food while watching Perkins console a fat woman, who tells a sad story about how a man from a fraternity asked her out as an excuse to make fun of her obesity. Sherman dozes off in front of the TV set and has another nightmare in which he becomes a giant and lays waste to the city with a single fart, which is lit accidentally. When he wakes, he finally yields to the temptation to try his new serum on himself. It seems to work perfectly: in seconds, he loses 250 pounds and becomes slim and fit. However, with his new body, Sherman also develops a split personality as well - the high testosterone levels causing his new personality to be overly confident and assertive, as well as demonstrating a desire to resort to violence on more than one occasion.
The following day, while still slim, he starts to flirt with Carla, who comes to the lab looking for Sherman. Quickly inventing the name "Buddy Love" for his new alter ego - based on a security guard's saying "Hey, buddy, what the hell happened here?". Although 'Love' is his own contribution, he invites Carla back to The Scream. However, the serum then begins to wear off (i.e. one hand bulking up and his voice returning to normal) and he ushers Carla out. Carla later tells Sherman about Buddy and Sherman encourages her to go out with him. At The Scream, Buddy turns up very late in a brand new Dodge Viper and persuades an angry Carla (who is about to leave) to go back inside. This time, when Reggie appears, Buddy heckles him mercilessly, fires off a barrage of jokes about his mother's weight, and finally takes the stage himself, performing a piece from Minnie Riperton's 1975 hit Lovin' You and forcing Reggie to do Minnie's signature high-pitched squeal before throwing the comedian into a piano.
Buddy returns to Carla, who is delighted with him. He gives a waiter a credit card to pay for the meal. Buddy and Carla then share a kiss. Immediately after, the serum begins to wear off and Buddy makes a quick exit, attributing it to an allergic reaction to Carla's lipstick (the 'bulking up' beginning with his lower lip). Jason happens to be at the bar and notes that the card Buddy is using belongs to Sherman. He follows Buddy into the sports car to confront him, only to learn Sherman's secret when he discovers him in mid-transformation, culminating in Sherman's having to be cut out of the car when he becomes too big to use the door.
The next morning, Sherman is very late for a class and his students have all left. The Dean, however, is there and he confronts Sherman about the sports car, which Buddy bought on Sherman's faculty account. The Dean threatens to strangle Sherman and 'cut off your air supply until you pass away' if he screws up again and asks him to meet Hartley at a hotel restaurant called The Ritz to describe the weight-loss serum.
Later, in the lab, Jason tells Sherman that he can't control Buddy, whose testosterone levels keep rising, using his out-of-character attitude as Buddy as an example. He warns him not to use the serum again and to focus instead on the research for Hartley. Later, Carla talks to Sherman about her date with Buddy and Sherman takes the opportunity to ask Carla to dinner with his family, who promptly embarrass him by making various suggestive comments about their relationship and Cletus farts again. His confidence low and, after Carla mentions that she would like the opportunity to get to know the caring person she sometimes sees in Buddy's eyes, he uses the serum again. Jason tries to stop Buddy, but to no avail. Sherman tries to communicate to Jason from deep down inside Buddy and instructs Jason to go into the storage closet to get an antidote, but the muscled Don Juan regains control and locks Jason in before departing.
Buddy, who is becoming ever more aggressive, takes Carla out on a second date - this time to the hotel where Sherman was to meet Hartley. The Dean, looking for Sherman, asks Carla if she knows where Sherman is, but Carla asks Buddy if he could take Sherman's place. With the Dean desperate to get the grant, he allows Buddy to talk to Hartley, but with Buddy subsequently taking all the credit for the work. Hartley and the Dean are both impressed, the Dean later asking if Buddy would be willing to fill in for Sherman on a more permanent basis.
Buddy then picks up three beautiful women at the hotel and invites Carla to participate in some "group action," which quickly prompts her to dump him. Undaunted, he throws a loud party at Sherman's house that night, burning all the health food products in the fridge. Having transformed back to his normal self during the night, Sherman awakens to find himself surrounded by strange women. He has no memory of the previous night and is stunned to find the whole house in disarray.
Carla arrives shortly thereafter to tell Sherman that she has left Buddy and to apologize about her encouraging Buddy to talk to Hartley. One of the women from the hotel the night before comes out of Sherman's room asking for Buddy and Carla thinks Sherman is as unfaithful as Buddy to the extent that the two of them actually share women. To add to Sherman's problems as he chases after her, he finds an eviction notice taped to his front door by his unseen grouchy downstairs neighbor and landlord, Mr. Wilson, owing to all the noise Buddy and the party had made during the night. Jason then enters the scene and tells Sherman that they need to go to the lab. Trying to collect himself, Sherman tells Jason that it needs to wait until later. However, Jason stresses that there won't be a later and a visit to the lab soon confirms that Dean Richmond has fired Sherman, replaced him with Buddy, given him Sherman's ticket to the alumni ball, and gloatingly promises to ruin Sherman.
At home, depressed, Sherman accidentally activates the VCR, where Buddy has left a message taunting Sherman and encouraging him to take the serum once again. This inspires Sherman to take his life back, resolved to prove that he can defeat Buddy. He and Jason start destroying all the serum samples, but, when he sips a diet drink that Buddy has craftily filled with the serum, he transforms again. Buddy, who has "taken on a life of his own" with a vengeance, tells Jason that he has calculated that if he drinks 500 mL of the serum, he will have enough cellular stability to be thin forever, thus "killing" Sherman; however, he cannot drink all of that serum at once, as it would (literally) kill Sherman and therefore Buddy, too. Buddy, however, has a plan to drink 250 mL of the serum while still in the lab and the other 250 at the alumni ball. He then knocks Jason out and heads to the alumni ball to carry out his plan, which will simultaneously prove the validity of Sherman's research.
Buddy arrives at the ball three hours late and starts acting rowdily to the disgrace of Dean Richmond, who scolds him for not being there on time. Buddy responds by threatening the Dean in the same way he threatened Sherman (by strangling him to death). He then begins to make his way to the stage where his plan will be put into place.
Back at the lab, Jason regains consciousness just in time to see a warning on the lab computer that Buddy's testosterone levels are at a lethally high 60,000% and darts out of the lab to head for the ball. There, Buddy begins to demonstrate the effects of the serum to the amazed audience (which includes the Dean, Carla, Hartley, and Sherman's parents), allowing himself to briefly 'bulk up' just enough to demonstrate how one sip of the serum is effective enough to make him thin. Then, as he prepares to drink the second dose of serum to stay Buddy Love forever, Jason runs in and tries to stop him. Buddy punches Jason, but Jason hits back.
As Buddy stands poised to return a blow, Sherman starts to "fight" him for control of his body: fat and thin body parts beginning with his right fist and subsequently varying around the rest of his body alternate with increasing speed while Buddy's voice shouts "You can't beat me!" and Sherman's voice replies "Yes I can!". Eventually, after a violent transformation/confrontation, Sherman wins the struggle. Still on stage, he tells the awed alumni that, while he started out wanting to help people, what he did was selfish and foolish and that he has learned that the important thing is to accept himself as he is, rather than being unhappy about how much he weighs. He leaves, but Carla stops him and asks him why he lied. He explains that he did not believe that she would accept him, but she assures him that it does not matter if he is overweight or not. Carla asks him to dance and he agrees Jason subsequently arriving with a tuxedo that fits. The two subsequently dance for the rest of the night, much to the approval of Jason and Sherman's family. Hartley then tells the Dean that he's decided to give Sherman the grant, because he's "a brilliant scientist and a gentleman."