The German army opened the Western Front in World War One by invading Belgium and Luxembourg before gaining control of the more industrialized areas of Northern France. Four years later, we meet a Jewish soldier, a Private, (Charlie Chaplin) who is fighting for Tomainia, one of the Quadruple Alliance, when he saves the life of Commander Schultz, a pilot who is gravely wounded. Schultz (Reginald Gardiner) is carrying documents that have the potential to ensure Tomainian victory in the battle. The plane that is now carrying both the Commander and the Private crashes; the Private survives but suffers a head injury that causes him to lose his memory.
The men are rescued from the wreckage, whereupon Schultz is informed that Tomainia has surrendered to the Allied Forces of the United States, England, and France.
Twenty years later, in 1938, the Private is still experiencing almost total memory loss about the incident. He returns to his pre-war profession; he works as a barber cutting hair in the ghetto, which is governed by a promoted Commander Schultz. He was promoted by the ruthless dictator who leads the brutal Tomainian regime. The Barber falls in love with his neighbor (Paulette Goddard) and both try to hide from the ever more murderous regime, but they discover the barber and they take him captive. He is to be hung in the town square, but is given a reprieve when Schultz recognizes and remembers him.
Dictator Adenoid Hynkel (Charlie Chaplin) is growing his military might, and needs money to finance it. He borrows money from a Jewish banker named Hermann Epstein; he hates the Jews but he is not too proud to borrow from them. Epstein, though, will not furnish him with a loan. Hynkel orders a culling of the Jews. When Schultz protests, he, too, is sent to a concentration camp but he escapes, returning to the ghetto where he goes into hiding alongside the Barber. He attempts to convince a Jewish family to carry out a suicide mission and assassinate Hynkel but they will not. Both Schultz and the Barber are marked men, and troops search for them until they are discovered. They are arrested, and sent to a concentration camp. Hannah, the woman with whom the Barber is in love, takes her family and flees, finding freedom in the neighboring nation of Osterlich. For the moment, at least, they are safe.
Meanwhile, the insane Hynkel becomes involved in a dispute with the country of Bacteria, and specifically with its leader, another dictator named Napaloni (Jack Oakie), because they cannot agree on which of them should invade and attempt to occupy Osterlich. Hannah's freedom is short lived; Hynkel invades Osterlich.
Schultz acquires stolen uniforms for himself and the Barber, enabling them to make their escape from the concentration camp. the Barber dresses as Hynkel, and the men travel to the border with Osterlich where a crowd has gathered, waiting to hear Hynkel's victory speech. The real Hynkel is mistaken for the Barber when he is seen out duck hunting in his civilian clothes, and is arrested and taken back to the camp from which it is believed he made his escape. There is nothing for it; the Barber will have to assume Hynkel's identity and give a speech to the rallying crowds. He is scared, but has a brainwave; he announces that "he" has seen the light. He does not want to divide anymore, but wants the nation to come together in an effort to achieve peace and brotherhood. He also includes a message to Hannah in his speech, which she hears, listening to the speech on the radio, and realizing that the man speaking is the Barber and not Hynkel. She is filled with hope again, and prepares to listen to the rest of the speech.
