The film is set in Hollywood, in present day Los Angeles and is a silent film. Mel Funn (Mel Brooks), a great film director, is now recovering from a drinking problem and down on his luck. He sets out to Big Picture Studios to pitch a new script to the Chief, aided by his ever-present sidekicks Dom Bell (Dom DeLuise) and Marty Eggs (Marty Feldman). His big idea: the first silent motion picture in forty years. At first the Chief (Sid Caesar), who is in danger of losing the studio to the (literally) rabid and greedy New York conglomerate Engulf & Devour (Harold Gould and Ron Carey), rejects the idea, but Funn convinces him that if he can get Hollywood's biggest stars to be in the film, he could save the studio.
Funn, Eggs, and Bell proceed to recruit various people for the film. Their first target is Burt Reynolds, whom they first surprise in his shower. This does not go well, but they are able to sign him on by appearing at his house in disguise (and almost getting him killed by a steamroller). They recruit James Caan despite a disastrous lunch in his broken trailer, and then torture Liza Minnelli at the studio commissary (fortunately, she already badly wanted to be in the movie).
They then disguise themselves as Flamenco dancers to get close to Anne Bancroft at a nightclub, and sign her on as well after a comical dance sequence. News breaks out that the Chief has taken ill and is in the hospital. While there, Mel phones Marcel Marceau in Paris who apparently declines the offer, delivering the only line of dialogue in the film, in French: "Non!" When asked by the others what Marceau said, Funn explains he doesn't understand French.
Paul Newman is seen on the hospital grounds. After leading them on a wild Hollywood-style chase in electric wheelchairs, he asks to be in the film. Funn and company reply with the typical Hollywood-esque "We'll get back to you." In the next shot, a newspaper ad indicates that they "ink" Newman to do the movie.
In the process of their search for stars, the trio have a number of brief but funny misadventures, including a mixup between two German Shepherds (one trained as a seeing-eye dog, the other most assuredly not), a flying blueberry pie, and several (mostly unsuccessful) efforts by Marty Eggs to seduce various women. Their most notable encounter involves a Coca-Cola machine that dispenses cans by launching them like grenades.
Engulf and Devour, meanwhile, worry that Funn will save Big Picture Studios and they will be unable to buy it. They attempt to "stop Funn with sex" by sending voluptuous nightclub sensation Vilma Kaplan (Bernadette Peters) to seduce Funn and pretend to be in love with him. Funn falls head over heels, but when Eggs and Bell reveal the truth to him on the day before filming begins, the director returns to drinking. Ironically, moments after this turn of events, Vilma is seen calling Mr. Engulf with the news that she is quitting: she has fallen for Funn for real. We see Mel stopping by a liquor store and buying what first appears to be an advertising prop in the store's window, but is actually a genuine giant bottle of liquor. After a misadventure involving a Skid Row hotel room and a murphy bed, Funn ends up in an alley where he dispenses booze from his giant bottle and is proclaimed "King of the Winos".
After a few hours of hitting the local gin mills, Vilma and Funn's associates find the would-be "King" passed out in a pile of his "subjects", but several hundred cups of coffee sober him up. Funn's silent movie is completed in record time. Unfortunately, the only copy of it is stolen from the theater by Engulf & Devour just before its big premiere.
Vilma volunteers to stall the movie theater's audience with her nightclub act while Funn and his associates go out to steal back their film. They succeed, but are chased by Engulf and Devour's thuggish executives. They are eventually cornered, but fortunately they are near the violent Coke machine, which they use against their foes. Most of the executives, including Mr. Devour, are disabled by the exploding cans of Coke, allowing Funn, Eggs, and Bell to escape. They hurry the film to the theater, where it is shown for the first time. In the meantime, Eggs has gotten himself tangled up in the film and he is immediately rushed up to the projection booth with the film wrapped around him. After the movie is over, the audience applauds wildly and leaps to its feet while balloons and streamers fill the air. "They seem to like it," Funn says.
The film ends with the jubilant audience filing out of the theater past Funn, Eggs, Bell, Vilma, and the recovered studio chief. At the end, a title card is shown: "This was a true story."