Jack Lucas (Bridges), a selfish, misanthropic shock jock, becomes suicidally despondent after his insensitive on-air comments inadvertently prompt an unstable caller to commit a mass murder-suicide at a popular Manhattan restaurant. Three years later, Jack is working with his girlfriend Anne (Ruehl) in a video store in a mostly drunken, depressed state. One night while on a bender, he attempts suicide. Before he can do so, he is mistaken for a homeless person and is attacked and nearly set on fire by thugs. He is rescued by Parry (Williams), a deluded homeless man who is on a mission to find the Holy Grail, and tries to convince Jack to help him. Jack is initially reluctant, but comes to feel responsible for Parry when he learns that the man's condition is a result of witnessing his wife's horrific murder at the hands of Jack's psychotic caller. Parry is also continually haunted by a hallucinatory red knight, who terrifies him.
Jack learns that Parry's real name is Henry Sagan and he was a teacher at Hunter College. Following his wife's death, Henry slipped into a catatonic state. When he emerged he took on the persona of Parry and became obsessed with the legend of the Fisher King.[note 1] Jack seeks to redeem himself by helping Parry find love again. He sets Parry up with Lydia (Plummer), a shy woman with whom Parry is smitten and who works as an accountant for a Manhattan publishing house. Jack and Anne then join them for a dinner date. Following dinner, Parry declares his love for Lydia but is once again haunted by the Red Knight. As he flees his hallucinatory tormentor, he is attacked by the same thugs who had earlier attacked Jack, which causes Parry to become catatonic again. Jack breaks up with Anne and begins to rebuild his career, but has a crisis of conscience during a sitcom pitch after snubbing a vagrant (Jeter) who had previously done him a favor.
Wearing Parry's clothing, Jack infiltrates the Upper East Side castle of a famous architect and retrieves the "Grail", a simple trophy which Parry believed to be the real Grail. When he brings it to Parry, the catatonia is broken and Parry regains consciousness. Jack learns that he inadvertently thwarted the famous architect's suicide attempt by triggering the alarm when leaving the Upper East Side castle. Lydia comes to visit Parry as usual in the hospital. She finds that Parry is awake and hears him and Jack leading the patients of the mental ward in a rousing rendition of "How About You?". Parry and Lydia embrace. Afterwards Jack goes back to the video store and tells Anne that he loves her. She punches him and then grabs him and kisses him. The film ends with Jack and Parry lying naked in Central Park gazing at the clouds.
Parry is a deluded homeless man, on a mission to find what?
Holy Grail