It's the summer of 1949 in a small Northern California town and Ed Crane (BILLY BOB THORNTON) is the local barber who works with his brother-in-law Frank (MICHAEL BADALUCCO). Rather introspective and quiet, Ed lets Frank chew the fat with the customers, seemingly content to smoke and watch the world go by.
Yet, beneath the calm demeanor, Ed isn't happy with his life. He suspects that his wife, Doris (FRANCES MCDORMAND), is having an affair with her boss, Big Dave (JAMES GANDOLFINI), who's married to the heiress, Ann Nirdlinger (KATHERINE BOROWITZ), of the department store where they work.
Thus, when traveling businessman Creighton Tolliver (JON POLITO) arrives in the barber chair promising bright returns for investments in a newfangled process called dry cleaning, Ed gets an idea. By blackmailing Big Dave, he can not only get revenge on him, but also raise the money needed to invest in Creighton's plan.
Things go as planned until someone ends up dead and Ed learns that Doris is being charged. Seeking advice from his non-criminal lawyer friend Walter Abundas (RICHARD JENKINS), whose teenager daughter, Birdy (SCARLETT JOHANSSON), and her piano playing have caught his attention, Ed hires hotshot defense attorney Freddy Riedenschneider (TONY SHALHOUB) to defend his wife.
From that point on, Ed's world is turned upside down as he tries to do both what's right and what seems like will make him happy.