Daniel Hillard (ROBIN WILLIAMS) would seem to have it all -- a talent for doing voice-over acting, a pretty and successful wife, Miranda (SALLY FIELD) and three good kids, teenager Lydia (LISA JAKUB), 12-year-old Chris (MATTHEW LAWRENCE) and 5-year-old Natalie (MARA WILSON). Yet, he can't seem to hold onto a job and that, coupled with the fact that Miranda no longer loves him, is leading them toward a divorce. It gets worse when a court hearing grants Miranda full custody with Daniel only getting Saturday visitation rights. His only remedy is to prove to court liaison Mrs. Sellner (ANNE HANEY) that he can find and keep a job and create a stable home setting.
Desperate to be with his kids, Daniel takes advantage of Miranda's desire to hire a housekeeper. Changing the number in her ad to keep away all other candidates and then using his gay brother and makeup artist Frank (HARVEY FIERSTEIN) to turn him into an older woman, Daniel shows up at his former home as Mrs. Doubtfire, a dowdy British housekeeper.
While the kids initially don't like her, Miranda does and hires her, unknowingly allowing Daniel back into her home. Keeping his identity secret from her and the kids, he also tries to undermine Miranda's growing attraction to her former college flame, Stu (PIERCE BROSNAN), a successful businessman who's looking to settle down. After getting a job at a local TV station run by Mr. Lundy (ROBERT PROSKY) who's looking for some new on-air talent, Daniel -- who's constantly alternating between his identities -- tries to balance his various quests, including bringing his family back together.