Plot

At the law offices of Schuylar Mifflin, Roger Cobb (Steve Martin) is a lawyer with eleven years behind him, and no future ahead of him. He is running himself ragged working into the evening, and his cases are of no consequence because he has not committed to the practice. His true passion is playing guitar in the Fulton Norris (Gailard Sartain) Orchestra, and after falling asleep at his desk he comes to just in time to rush to a nightclub gig and perform his solo, but he eventually falls asleep again onstage.

On the morning of his 38th birthday, his girlfriend Peggy Schuyler (Madolyn Smith) brings him an African grave post for a present. They discuss "the m word" briefly, but Roger seems disinterested in marriage. He is late to work at the law firm, which is her father's, and he was hired as a favor, in spite of being perceived as carrying on his family's misguided standards. On the way to the office, Roger and his canine companion Bix stop by a corner where their blind musician buddy Tyrone Wattell (Jason Bernard) is playing his saxophone for tips. Roger tells Tyrone he has decided to quit his gig and work on law full time. Tyrone tells him it is a mistake to give up his music, but wishes him well.

At a palatial estate, Doctor Betty Ahrens (Peggy Feury) informs her frail millionaire patient Edwina Cutwater (Lily Tomlin) that after years of disability because of her chronic heart trouble, she is finally and truly dying. Edwina calls Schuyler Mifflin to speak with senior partner Burton Schuyler (Dana Elcar) to put her final affairs in order. Burton is having an affair with Gretchen (Neva Patterson), and he interrupts their merrymaking to take her call, as Gretchen informs him that his wife subpoenaed her to appear at the divorce hearing.

Roger arrives at his office and his secretary Margot (Selma Diamond) reads off his client phone messages before he is summoned to Burton's office. Roger asks Burton for a partnership, saying he has quit the band and is buying a vest later in the day. Intrigued by his attitude, Burton sends him to the Cutwater estate to test his mettle, noting that if Roger is up to the task, his future in the firm is secure.

Roger arrives to see Edwina in her wheelchair ordering her staff around, and she treats him as if he were a hired hand. When she learns who he is, she tells Roger she plans to leave her entire multi-million dollar estate to Terry Hoskins (Victoria Tennant), the vibrant daughter of the stable hand Fred Hoskins (Eric Christmas), and Roger will handle the paperwork. He also learns that Terry will actually inherit nothing, as Edwina has hired a guru named Prahka Lasa (Richard Libertini) to transport her soul into Terry's healthy body so she can have a chance at a normal life. Prahka speaks only parroted English and carries a metal bowl with him which will be a vessel for Edwina's soul when her death is imminent. Roger suggests that her will would be contested if she is not considered of sound mind, and Edwina, spoiled and used to getting her way, insults him. He declares her and her companions crazy, and Edwina slaps him, threatening to tattle to Burton about his undesirable behavior. When Roger talks back to her and leaves, Edwina issues orders to the staff for her car and jewelry to wear as she plans to go out. Terry tells Roger she is willing to give up everything to become one with the universe, but he scoffs.

When Roger returns to the firm, Margot reveals that Edwina is already there in a board meeting with Burton and the firm's other partner Mr. Mifflin (Michael Ensign). The doctor, Terry and Prahka stand by as Edwina's attitude goads Roger into more arguing, but when Burton pulls him aside and they step out of the office, he laughs off the conflict and agrees that she must be out of her mind to believe in reincarnation.

After Roger leaves, Edwina suddenly says she sees a bright light and collapses, while the doctor makes futile attempts to revive her and Prahka sets up the bowl on its stand and he and Terry begin chanting. The bowl spins atop its pole, then settles as if something were inside. During the confusion, the doctor pushes Burton and he bumps the vessel, which goes out the window. As the doctor declares they have lost Edwina, the bowl lands on Roger as he emerges from the building, hitting him in the head. He tries to get up from the pavement as Edwina's voice says she feels different. He stumbles as if his body were not his own. Looking in a car's side mirror, Roger is horrified to see Edwina staring back at him, and they realize that her soul has entered his body by accident. Bix barks at Roger, perceiving the change in his human companion. They struggle to walk properly, and it appears that Edwina is in control of his right side and he his left. Finally they manage to coordinate their gait and return to the building, but before they can go to the office to find Prahka and reverse the error, Roger realizes he needs to use the restroom. Mifflin sees that Roger seems to be acting strangely. The newly merged pair make their way to the men's room.

At the urinal, Roger has to coordinate the act of relieving himself with Edwina, who has trouble using his right hand under her control, unfamiliar as she is with men's clothing and genitals. Her grip sends him staggering and in pain, but with coaching from Roger and resignation on Edwina's part, they manage the task. Behind them a curious Mifflin observes Roger speaking in a feminized mashup of Edwina's and his own voice, before she finally tells him that she can read his thoughts and they successfully and quietly finish their bathroom break. In the hallway, Roger admits to Mifflin he was talking to himself. Terry approaches as Mifflin leaves, and says Prahka has left.

Burton calls Roger into his office to handle his own divorce case. He confesses that he originally cheated on his wife to comfort a grieving widow, but then so many women found him attractive that he could not stop, and he wants defense from somebody he can trust. Roger reluctantly agrees to take the case.

Returning to his office, Edwina tells Roger to look for the phone number to the Ambassador Hotel where Prahka is staying. At the hotel, Prahka is out of his element, having lived his entire life in Tibet with no luxuries, but he discovers the toilet and flushes it just as Roger places the phone call, and the phone in the other room rings. Believing the flush causes the ringing, the curious Prahka operates the lever until the ringing stops when Roger hangs up. Peggy arrives at the office and overhears Roger as he and Edwina resume the argument aloud about the bathroom episode. Believing he is cheating on her, Peggy storms in and demands an explanation. Edwina overrides Roger and throws in her opinion as he tries to tell her what happened, and she mishears Roger as saying he had sex with the dead body of Edwina. She is also mad that he is siding with her father in the divorce case and gives him the ultimatum of either herself or his manhood. He picks the latter and Peggy leaves, saying their relationship is over.

Determined to find Prahka, Roger tries to drive with Edwina, while Bix shows hostility toward her being in Roger's body, so he decides to not inconvenience his canine friend and drops the dog off with Tyrone for safekeeping. When Tyrone questions Roger, he relates what happened, and incredibly he believes him. Roger introduces Edwina to Tyrone, and she offers her right hand, forgetting it belongs to Roger. Tyrone kisses it and says he is happy to help because, though he considers Roger a bit strange, he is a true friend.

At the memorial service for Edwina, the church is empty but for the presiding cleric and choir, but her oxygen provider and other health aid companies sent mail-grams of condolence. Roger falls asleep in the pew, and Edwina with him. After midnight Terry arrives, and he realizes that he has full control of his body while Edwina sleeps, and he tells Terry everything. She says that if she is going to surrender her body for Edwina, Roger could do her the favor of a last memorable night of passion, so they go to his place and start making love. Suddenly Edwina wakes up and is stunned to see what is happening, but Terry enjoys her retorts as a form of rough foreplay, even enjoying Edwina's attempts to spank her. Despite pleas from Roger, Edwina puts an end to the evening. Terry leaves, realizing that Edwina is indeed inside Roger. When Roger mentions that it was unfair to deprive him of happiness since nobody likely wanted to have sex with Edwina, she says she was always proud to have saved herself. She then breaks down and confesses that she had no friends in her lifetime, which explained the lack of attendees at her memorial. She tells a sad childhood story of a cruel clown who refused to perform for her, and of watching Terry doing all the things she could not as she watched from bed, miserable to be on the sidelines. They reach an understanding, and Roger lets her sleep while he studies the case for Burton.

Next morning, after no sleep, Roger tries the hotel again, but Prahka simply ignores the phone and resumes flushing the toilet. Edwina exercises for a groggy Roger and helps him perform his morning routine, saying she looks forward to having a new body. Roger's court appearance is at 8:30 and the funeral is at 10:30, but Roger says he will work it out.

At court Burton appears to be losing his case, and Roger falls asleep with Edwina unable to wake him, so she improvises, trying to speak in a lower voice and adapt male mannerisms, but she chooses rude behaviors like hawking and spitting, scratching his crotch and blowing a snot rocket, to the discomfort of the courtroom. She asks Burton about the expensive gifts he gave to the women he was accused of cheating with on his wife, saying that gifting clients was a commonplace business expense. The attorney for his wife says the money was from his personal and not the firm's account, placing the testimony in danger, so a stymied Edwina screams mentally to Roger to wake him up, and he startles back to consciousness. When he asks for and hears the repeat of the court clerk's notes, Roger triumphantly equates Burton's gifts to a perpetual gratuity based on the firm's success and his own salary, which equally supported his own wife in a consistently grand manner. The judge overrules the objection by the other attorney, but when Roger brags mentally to himself that none of Burton's women were clients, Edwina realizes the defense is unfair and blurts it out to the judge before Roger can stop her. Burton fires Roger, the judge fines him for contempt and has him tossed out of the room. Edwina says he is better off not being a lawyer who works against the ideals his family instilled in him, and while married to a woman like Peggy, but he is furious at his unraveled life.

Terry puts Prahka into a taxi and pays the driver $200 to stay with him until he is aboard his late night flight back to Tibet. Roger meets her at the funeral, and Edwina sees that Roger has arranged for Tyrone and the orchestra to follow her hearse in an old fashioned New Orleans style procession. When Roger borrows a compact mirror from Terry he sees Edwina is crying with happiness, grateful for what she says is the best gift from the best friend she ever had. Terry demurs when Roger asks if Prahka will show up, and they go to the hotel to check on him. They end up trying again to make love until Edwina thinks of old nuns to kill the mood. Stepping into the restroom, Edwina says she doesn't want to sit in on their sexual exploits, but Roger convinces her to enjoy herself as she starts to pick up on the arousal that is starting to overwhelm their shared body. Prahka then returns from the airport unexpectedly, and upon seeing that Edwina is in Roger's body, he readies the bowl, but Terry dresses to leave, saying Roger must be crazy to think she will give up her body and the inheritance that she now owns.

Upset that she made a mistake with Terry, Edwina asks Prahka to give Roger his body back, saying he can put her soul into another creature, but Roger is determined to help her, because his family instilled that sense of justice in him, and refuses. She enjoys being selfless for the first time in her life.

Back at the Cutwater estate, Terry orders her father to shower and dress in a tuxedo for her party as the orchestra arrives with two new members-Roger and Prahka--and Bix in a guide harness with Tyrone. At rehearsal, Edwina admires Roger for being such a good musician, and says he should play full time, but she has trouble letting him play his guitar solo, and the rehearsal breaks up. Near the stables, Roger and Prahka wait for Terry to ride in and dismount her horse, and ambush her as Prahka puts Edwina in the bowl. Terry struggles with them, the horse kicks the bowl and it lands in a bucket of water. The bowl is dented, so Prahka needs to fix it before he can get Edwina out of the water, so Roger escapes and creates several distractions as Terry sends guards to pursue him. He puts the water into a glass pitcher, gives it to Tyrone, and refills the bucket with tap water, pausing sadly to see his own reflection in the mirror as Edwina is not with him, then runs with the guards in pursuit until he feigns clumsiness and dumps the bucket into some flowers. He then sees Terry with the pitcher. She pours the contents into a nearby flower bed and calls off the guards, saying Roger is no longer a threat.

A sad Roger meets up with Tyrone, who apologizes for not being able to see when the pitcher was taken. Roger relates that he misses the old girl, and Tyrone answers with a retort in Edwina's voice, revealing that he drank the water with her in it. They find Prahka, who has fixed the bowl, and Roger asks Prahka to move Edwina out of Tyrone into him again, as he is the only safe place.

The trio and Bix then approach the house after the party and try to sneak in, but Terry prepares a pistol when she hears noises and surprises them, leading them to another room while she tries to concoct a story before she does away with them. The room she chooses has Burton and Gretchen in it, and in the unexpected discovery a scuffle ensues and Roger wrests the gun from her. When Burton says she will be arrested for attempted murder, she says she refuses to surrender as it will be her third conviction and she will go to jail, so she bargains with Edwina. With Fred looking on, Prahka succeeds in placing Edwina into Terry's body, while Terry takes over the body of her favorite horse, whom Fred promises to look after for the rest of her life.

In the grand hall, Edwina, now in Terry's body, tells Roger she is scared that now she has no excuses and has what she has always wanted. Roger says he has decided to give up law, and as they enter the ballroom floor he offers to teach her to dance. The mirror reflects the real Edwina sharing her first dance and new life with her new best friend.