Stu Miley (BRENDAN FRASER) is a modest cartoonist who's finally achieving success in both his professional and personal life. His ribald comic strip creation, Monkeybone, that features a wisecracking and salacious simian of the same name, is about to become a national TV show, and he's about to propose to his beautiful girlfriend, Julie McElroy (BRIDGET FONDA).
While his manager, Herb (DAVID FOLEY), wants to market the Monkeybone franchise as much as possible, Stu wants to keep things simple. Unfortunately, he doesn't get the chance when a freak accident leaves him in a coma, with his conscious self sinking down into a bizarre world called Downtown, where others exist in an odd, carnival-like way station halfway between the living and death.
While Julie stays by his side and tries to ward off the attempts of Stu's sister, Kimmy (MEGAN MULLALLY), from pulling the plug on him, Stu's subconscious self in Downtown meets the physical incarnation of Monkeybone (voiced by JOHN TURTURRO), an irritating and ever-present monkey who's a constant thorn in his side when not making lewd comments to Kitty (ROSE McGOWAN), a waitress dressed in a cat motif.
Stu also meets Hypnos (GIANCARLO ESPOSITO), the half man, half goat ruler of Downtown, who informs him that the only way out is to travel to the underworld and steal an "exit pass" from none other than Death (WHOOPI GOLDBERG). Stu tries just that, but then learns that Hypnos has enlisted Monkeybone to steal the pass, travel up top and possess Stu's body, and then induce nightmares in the living for the entertainment of those stuck in Downtown. From that point on, and after being placed in the organ donor body of a dead gymnast (CHRIS KATTAN), Stu does what he can to stop his creation from doing all of that.