In 1939, in Fascist Italy, Guido Orefice is a young Italian Jewish man who arrives to work in the city of Arezzo, in Tuscany, where his uncle Eliseo works in the restaurant of a hotel. Guido is comical and sharp and falls in love with a Gentile girl named Dora. Later, he sees her again in the city where she is a teacher and set to be engaged to Rodolfo, a rich but arrogant local government official with whom Guido has regular run-ins. Guido sets up many "coincidental" incidents to show his interest in Dora.
Finally, Dora sees Guido's affection and promise and gives in, against her better judgment. He steals the lady from her engagement party, on a horse, humiliating her fiancé and mother. They are later married, have a son Giosuè, and run a bookstore.
During World War II, in 1944 when Northern Italy is occupied by Nazi Germany, Guido, his uncle Eliseo, and Giosuè are seized on Giosuè's birthday. They and many other Jews are forced onto a train bound for a concentration camp. After confronting a guard about her husband and son and being told there is no mistake, Dora volunteers to get on the train in order to be close to her family.
However, as men and women are separated in the camp, Dora and Guido do not see each other during the internment. Guido pulls off various stunts, such as using the camp's loudspeaker to send messages—symbolic or literal—to Dora to assure her that he and their son are safe. Eliseo is murdered in a gas chamber shortly after their arrival. Giosuè narrowly avoids being gassed himself as he hates to take baths and showers, and did not follow the other children when they had been ordered to enter the gas chambers and were told they were showers.
In the camp, Guido hides the true situation from his son. Guido tells Giosuè that the camp is a complicated game in which he must perform the tasks Guido gives him. Each of the tasks will earn them points and whoever gets to one thousand points first will win a tank. He tells him that if he cries, complains that he wants his mother, or says that he is hungry, he will lose points, while quiet boys who hide from the camp guards earn extra points. Giosuè is at times reluctant to go along with the game, but Guido convinces him each time to continue.
At one point Guido takes advantage of the appearance of visiting German officers and their families to show Giosuè that other children are hiding as part of the game, and he also takes advantage of a German nanny thinking Giosuè is one of her charges in order to feed him as Guido serves the German officers. Guido and Giosuè are almost found out to be prisoners by another server until Guido is found teaching all of the German children how to say "Thank you" in Italian, effectively providing a ruse.
Guido maintains this story right until the end when, in the chaos of shutting down the camp as the Allied forces approach, he tells his son to stay in a box until everybody has left, this being the final task in the competition before the promised tank is his. Guido goes to find Dora, but he is caught by a German soldier. An officer orders Guido to be executed and Guido is led off by the soldier. While he is walking to his death, Guido passes by Giosuè one last time and winks, still in character and playing the game. Guido is then shot and left for dead in an alleyway.
The next morning, Giosuè emerges from the sweat-box, just as a U.S. Army unit led by a Sherman tank arrives and the camp is liberated. Giosuè is overjoyed about winning the game (unaware that his father is dead), thinking that he won the tank, and an American soldier allows Giosuè to ride on the tank.
While traveling to safety, Giosuè soon spots Dora in the procession leaving the camp and reunites with his mother. While the young Giosuè excitedly tells his mother about how he had won a tank, just as his father had promised, the adult Giosuè, in an overheard monologue, reminisces on the sacrifices his father made for him and his story.
Roberto Benigni as Guido Orefice, an Italian-Jewish waiter and Giosuè's father
Nicoletta Braschi as Dora Orefice, a Gentile woman, Guido's wife, and Giosuè's mother
Giorgio Cantarini as Giosuè Orefice, the son of Guido and Dora
Giustino Durano as Uncle Eliseo, Giosuè's granduncle and Guido's uncle
Horst Buchholz as Doctor Lessing, a doctor at the concentration camps who was a regular customer at Eliseo's restaurant. He often tries to solve riddles when with Guido
Marisa Paredes as Dora's mother, a rich socialite
Sergio Bustric as Ferruccio, Guido's bumbling partner
Amerigo Fontani as Rodolfo, Dora's former husband to be and a government official
Lydia Alfonsi as Guicciardini
Giuliana Lojodice as the Headmistress
Pietro Desilva as Bartolomeo
Francesco Guzzo as Vittorino
Raffaella Lebboroni as Elena
Claudio Alfonsi as Rodolfo's friend
Richard Sammel as Waffen-SS Officer
Omero Antonutti as the voice of the narrator (uncredited)
partially inspired by the book In the End, I Beat Hitler by Rubino Romeo Salmonì and by Benigni's father, who spent two years in the Bergen-Belsen concentration camp during World War II.
In Italian with English subtitles