Sam Dawson (Sean Penn), a man with a developmental disability, lives in Los Angeles, works at Starbucks, and is the sole guardian of his six-year-old daughter Lucy (Dakota Fanning), after her mother abandoned them. Despite his limitations, Sam is well-adjusted and has a supportive group of friends with developmental disabilities, as well as a kind, agoraphobic neighbor Annie (Dianne Wiest) who takes care of Lucy when Sam cannot. Though Sam provides a loving and caring environment for precocious Lucy, she soon surpasses his mental ability. Other children tease her for having a "retard" as a father, and she becomes too embarrassed to accept that she is more intellectually advanced than Sam. In preparation for a custody case, a social worker turns up at Lucy's birthday party and takes her away, allowing Sam two supervised visits per week.
On the advice of his friends, Sam approaches a high-powered lawyer, Rita Harrison (Michelle Pfeiffer), whose brusque manner, fast-paced schedule and difficult personal life have earned her a reputation as cold and unfeeling. In an attempt to prove to others that she isn't heartless, Rita surprisingly agrees to take on Sam's case for free (pro bono). As they work together to secure Sam's parental rights, Sam unwittingly helps Rita with her family problems, including encouraging her to leave her philandering husband and repairing her fractious relationship with her son.
During the trial period, Lucy is living in a foster home with Randy Carpenter (Laura Dern), but tries to convince Sam to help her run away, and continually escapes in the middle of the night to go to Sam's apartment, whereupon he immediately returns her. At the trial, Sam breaks down after opposing counsel convinces him that he is not capable of being a father.
Sean Penn was nominated for the Academy Award for Best Actor (the Oscar), the Screen Actors Guild Award for Outstanding Performance by a Male Actor in a Leading Role, the Broadcast Film Critics Association Award for Best Actor and the Satellite Award for Best Actor - Motion Picture Drama.
Dakota Fanning won the Broadcast Film Critics Association Award for Best Young Performer, the Las Vegas Film Critics Society Award for Youth in Film, the Phoenix Film Critics Society Award for Best Youth Actress, the Satellite Special Achievement Award for Outstanding New Talent, and the Young Artist Award for Best Performance in a Feature Film - Young Actress Age Ten or Under. She was also nominated for the Screen Actors Guild Award for Outstanding Performance by a Female Actor in a Supporting Role.
The soundtrack was nominated for the Grammy Award for Best Compilation Soundtrack Album for a Motion Picture, Television or Other Visual Media.
The film won the inaugural Stanley Kramer Award from the Producers Guild of America, and was nominated for the Humanitas Prize and the Japan Academy Prize for Outstanding Foreign Language Film.