Conspiracy-theorist New York City taxi driver Jerry Fletcher (Mel Gibson) continually expounds his ideas to his young lady friend Alice Sutton (Julia Roberts), who is a lawyer working for the U.S. government at the Justice Department. She humors him because he once saved her from a mugging, but does not know he has been spying on her at home. Her own work is to solve the mystery of her father's murder. Seeing suspicious activity everywhere, Jerry identifies some men as CIA workers, follows them into a building, and is captured. A doctor (Patrick Stewart) injects a wheelchair-bound Jerry with LSD and interrogates him using torture. Jerry experiences terrifying hallucinations and flashbacks, panics, and manages to escape, incapacitating the doctor by biting his nose.
Handcuffed to the hospital bed and forced into a drug-induced sleep, Jerry persuades Alice to switch his chart with that of a criminal in the next bed or he will be dead by morning. When Alice visits the next day, the criminal is dead, allegedly from a mysterious heart attack. The CIA, FBI and other agencies are there, led by a CIA psychiatrist Dr. Jonas, whose nose is bandaged. Meanwhile, with Alice's help, Jerry fakes a heart attack and escapes again. The pair go to Alice's apartment and Jerry accidentally reveals he's been watching her. Jerry confronts FBI agent Lowry and his partner staking out her place, and he warns them at gunpoint not to hurt her. Jerry sees their operatives rappelling down from black helicopters and hides in a theater, escaping by causing a panic.
Alice calls each person on the newsletter mail-list and finds that all have recently died, except one. Jerry uses a ruse to get her out of the office, and then immobilizes the operatives watching her. During their escape, he tells her that he loves her, then flees on a subway train when she brushes off his feelings. She goes to see the last surviving person on the subscription list, and finds it is Jonas. He explains that Jerry was brainwashed during Dr. Jonas' time with Project MKULTRA to become an assassin and claims that Jerry killed her father. She agrees to help find Jerry, who sends her a message to meet him. They ditch the agents following them and he drives her to her father's private horse stables in Connecticut, but Alice secretly calls her office so that Jonas can track her. At the stables, Jerry remembers that he was sent to kill her father but found he could not. Jerry instead promised to watch over Alice before the judge was killed by another assassin. Jonas' men capture Jerry, and a sniper tries to get Alice, but she escapes.
Meanwhile, Alice finds Lowry and forces him at gunpoint to admit that he is not FBI, but from a "secret agency that watches the other agencies" and has been using the unwitting Jerry to uncover and stop Jonas. Alice goes to the site of the smokestacks from Jerry's mural and sees a mental hospital next door. There she bribes an attendant to show her an unused wing, breaks in, and finds Jerry. As Jonas catches them, Lowry arrives with his men and attacks Jonas' men. Jerry attempts to drown Jonas, but is shot. After killing Jonas, Alice finally tells Jerry she loves him before he is taken away in an ambulance. Some time later, Alice visits Jerry's grave, leaving a pin he gave her upon it, before returning to horse riding. While watching from a car with Lowry whose real name is Hatcher, Jerry agrees not to contact Alice until all of Jonas' other subjects are caught, but she joyfully finds the pin attached to her saddle.
Who is leading the CIA, FBI, and other agencies at the hospital?
Dr. Jonas