In 1991 Los Angeles, Jeffrey “The Dude” Lebowski, a middle-aged bachelor with a penchant for cannabis and bowling, is assaulted by two goons hired by pornographer Jackie Treehorn, demanding money owed by the wife of another Jeffrey Lebowski (the eponymous “Big Lebowski”). Realizing they have the wrong man, they leave after one of them urinates on the Dude’s rug.
On the advice of his bowling partners Donny Kerabatsos and Vietnam veteran Walter Sobchak, the Dude seeks compensation from the other Lebowski, a wealthy, disabled philanthropist who refuses his request. Leaving Lebowski’s mansion, the Dude takes a valuable rug and meets Bunny, Lebowski’s young trophy wife.
Days later, the Dude is told that Bunny has been kidnapped, and Lebowski wants the Dude to deliver the ransom money to find out if the kidnappers are the same people who peed on his rug. The Dude informs Walter and Donny about the kidnapping and suggests that Bunny may have staged her own kidnapping to use the ransom money to pay off her debts; Walter is immediately convinced of this and becomes incredulous at her greed. That night, another pair of thugs knock the Dude unconscious and take his new rug.
The kidnappers arrange a meeting, and Walter accompanies the Dude. Still convinced that Bunny “kidnapped herself”, he enacts a plan to give them another briefcase, containing Walter’s “dirty undies”, so he and the Dude can keep the ransom money. To the Dude’s horror, Walter gives the kidnappers the fake briefcase. After another game of bowling, the Dude’s car is stolen with the real briefcase inside.
Lebowski’s daughter Maude calls the Dude, explaining that she took the rug and inviting him to visit her. She plays him a pornographic video revealing Bunny was one of Treehorn’s actresses. Confirming the Dude’s theory that Bunny staged her own abduction, Maude asks the Dude to recover the ransom which her father withdrew from the family’s personal foundation. Lebowski confronts the Dude, angry that he failed to deliver the ransom, and shows him a severed toe presumed to be Bunny’s. Three German nihilists threaten the Dude, identifying themselves as the kidnappers, however Maude says they are friends of Bunny.
The Dude’s car is recovered by police, minus the briefcase, but inside the Dude finds the homework of a high school student named Larry Sellers. Walter and the Dude confront Larry at his family’s home, and Walter uses a crowbar to wreck a new sports car parked outside which he believes Larry bought with the stolen money. The car’s real owner rushes outside and wrecks the Dude’s car in revenge, thinking it to be Walter’s.
The Dude is forcibly brought to Treehorn, who is seeking Bunny and the money she owes him. Treehorn drugs the Dude’s white Russian cocktail, causing him to dream about starring in a Treehorn film about bowling with Maude. Awakening in police custody, the Dude is assaulted by the Malibu police chief. After being kicked out of a cab for hating the Eagles, the Dude is unknowingly passed by Bunny, revealed to still have all of her toes. The Dude returns home to find his bungalow ransacked by Treehorn’s goons. He is seduced by Maude, who hopes to conceive a child but wishes him to have no involvement in its upbringing. She explains that her father has no money of his own, as her late mother left everything to the family charity.
Having had an epiphany, the Dude has Walter drive him to the Lebowski estate, where Bunny has returned, and the truth of her disappearance is revealed: When Bunny left town on an unannounced trip, her nihilist friends faked her kidnapping to extort money from her husband; Lebowski, who hated his wife, withdrew the ransom from the foundation but kept it for himself, instead giving the Dude a briefcase containing phone books. Walter and the Dude confront Lebowski, who refuses to admit responsibility, so Walter picks him up and throws him out of his wheelchair, thinking he is also faking his paralysis.
The Dude and his friends return to the bowling alley, where they are confronted by the nihilists. Learning there was never any money, the nihilists try to rob them but Walter violently fends them off. During the scuffle, Donny suffers a fatal heart attack and dies.
Some time later, after delivering an informal eulogy to Donny at the beach, Walter accidentally scatters Donny’s ashes onto the Dude. They go bowling, and the Dude encounters the film’s cowboy narrator, who tells the audience that Maude is pregnant with a “little Lebowski” and hopes that the Dude and Walter will win their upcoming bowling tournament.