On the Western Front in 1918, a Jewish Private (Charlie Chaplin) fighting for the Central Powers nation of Tomainia valiantly saves the life of a wounded pilot, Commander Schultz (Reginald Gardiner), who carries valuable documents that could secure a Tomainian victory. However, their plane crashes mid-flight, and the Private subsequently suffers memory loss. Upon being rescued, Schultz is informed that Tomainia has officially surrendered to the Allied Forces, while the Private is carried off to a hospital.
Twenty years later, still suffering from amnesia, the Private leaves the hospital to return to his previous profession as a barber in the ghetto. The ghetto is now governed by Schultz, who has been promoted in the Tomainian regime under the ruthless dictator Adenoid Hynkel (also Chaplin).
The Barber falls in love with a neighbor, Hannah (Paulette Goddard), and together they try to resist persecution by military forces. The troops capture the Barber and are about to hang him, but Schultz recognizes him and restrains them. By recognizing him, and reminding him of World War I, Schultz helps the Barber regain his memory.
Meanwhile, Hynkel tries to finance his ever-growing military forces by borrowing money from a Jewish banker called Hermann Epstein, but the banker refuses to lend him the money. Furious, Hynkel orders a purge of the Jews. Schultz protests this inhumane policy and is sent to a concentration camp. He escapes and hides in the ghetto with the Barber. Schultz tries to persuade the Jewish family to assassinate Hynkel in a suicide attack, but they are dissuaded by Hannah. Troops search the ghetto, arrest Schultz and the Barber, and send both to a concentration camp. Hannah and her family flee to freedom at a vineyard in the neighboring country of Osterlich.
Hynkel has a dispute with the dictator of the nation of Bacteria, a man named Benzino Napaloni (Jack Oakie), over which country should invade Osterlich. The two dictators argue over a treaty to govern the invasion, while dining together at an elaborate buffet, which happens to provide a jar of “English Mustard”. The quarrel becomes heated and descends into a food fight, which is only resolved when both men eat the hot mustard and are shocked into cooperating. After signing the treaty with Napaloni, Hynkel orders the invasion of Osterlich. Hannah and her family are trapped by the invading force and beaten by a squad of arriving soldiers. The squad leader strikes Hannah to the ground, stands over her, and cruelly eats her basket of grapes.
Escaping from the camp in stolen uniforms, Schultz and the Barber, dressed as Hynkel, arrive at the Osterlich frontier, where a huge victory-parade is waiting to be addressed by Hynkel. The real Hynkel is mistaken for the Barber while out duck hunting in civilian clothes and is knocked out and taken to the camp. Schultz tells the Barber to go to the platform and impersonate Hynkel, as the only way to save their lives once they reach Osterlich’s capital. The Barber has never given a public speech in his life, but he has no other choice.
The terrified Barber mounts the steps but is inspired to seize the initiative. Announcing that he (as Hynkel) has had a change of heart, he makes an impassioned plea for brotherhood and goodwill.
Finally, he addresses a message of hope to Hannah, in case she can hear him.
Hannah hears the Barber’s voice on the radio. She turns her face, radiant with joy and hope, toward the sunlight, and says to her fellows: “Listen.”