In the small town of Endora, Iowa, Gilbert Grape (Johnny Depp) is busy caring for Arnie (Leonardo DiCaprio), his mentally impaired brother, as they wait for the many tourists’ trailers to pass through town during an annual Airstreamers’ Club gathering at a nearby recreational area. His father had hanged himself 17 years earlier, and since then his mother, Bonnie (Darlene Cates), has spent most of her days on the couch watching TV and eating. With Bonnie’s morbid obesity leaving her unable to care for her children on her own, Gilbert has taken responsibility for repairing the old house and looking after Arnie, who has a habit of climbing the town water tower, while his sisters Amy (Laura Harrington) and Ellen (Mary Kate Schellhardt) do the rest. The relationship between the brothers is of both care and protection, as Gilbert continually enforces a “nobody touches Arnie” policy. A new FoodLand supermarket has opened, threatening the small Lamson’s Grocery where Gilbert works. In addition, Gilbert is having an affair with a married woman, Betty Carver (Mary Steenburgen).
The family is looking forward to Arnie’s 18th birthday. A young woman named Becky (Juliette Lewis) and her grandmother are stuck in town when the International Harvester Travelall pulling their trailer breaks down. Gilbert’s unusual life circumstances threaten to get in the way of their budding romance. In order to spend time with Becky to watch the sunset, Gilbert leaves Arnie alone in the bath. He returns home late and finds that Arnie is still in the bath the following morning, shivering in the now cold water; his guilt is compounded by his family’s anger and Arnie’s subsequent aquaphobia. His affair with Betty ends when she leaves town in search of a new life following her husband’s death—who drowned in the family’s wading pool after suffering a heart attack. Becky becomes close to both Gilbert and Arnie. While they are distracted during one of their talks, Arnie returns to the water tower that he is always trying to climb. Arnie is arrested after being rescued from the top of the tower, causing his mother—who has not left the house in over seven years—to become the object of pointing, laughing, and gawking from the townspeople as she goes to the police station, forcing Arnie’s release.
Soon after, Arnie tries to run away from his bath and in his frustration, Gilbert finally snaps, hitting Arnie several times. Guilty and appalled at himself, Gilbert runs out and drives away in his truck without another word. Arnie also runs out and goes to Becky’s, who takes care of him for the evening (and helping him overcome his aquaphobia) until he is picked up by his sisters. After some soul searching aided by Becky, Gilbert returns home during the birthday party to make amends to his family for running out and to be forgiven by Arnie which, with only the slightest hesitation, he is. He apologizes to his mother for his behavior and promises that he is not ashamed of her and that he will not let her be hurt anymore. She admits to Gilbert her knowledge of what a burden she has become to the family, and he forgives her. He introduces her to Becky — something he had been reluctant to do earlier.
Following Arnie’s 18th birthday party, Bonnie climbs the stairs to her bedroom for the first time since her husband’s suicide. Arnie later tries to wake her but discovers that she has died. The children, not willing to let their mother become the joke of the town by having her corpse lifted from the house by crane, empty their family home of possessions and set it on fire with her in it, burning her to ashes and the house down. A year later, Gilbert describes what happened to his family after his mother’s death (Amy is managing a bakery while Ellen is looking forward to switching schools) as Gilbert and his brother Arnie wait by the side of a road for Becky, who arrives with her grandmother and picks them up.