Melvin Udall, a cranky, bigoted, obsessive-compulsive writer of romantic fiction, is rude to everyone he meets, including his gay neighbor, Simon. After Simon is hospitalized, Melvin finds his life turned upside down when he has to look after Simon's dog. In addition, Carol, the only waitress at the local diner who will tolerate him, must leave work to care for her sick son, making it impossible for Melvin to eat breakfast.

When Daniel is fired right before his son's expensive surgery, an angel takes him on a journey back in time to witness the trials of Joseph and Mary before the very first Christmas, reminding him how God's love can carry him through anything.