Stanley Ipkiss (Jim Carrey), an insecure bank clerk working at the local Edge City bank, is frequently ridiculed by everyone around him except for his co-worker and best friend Charlie Schumaker (Richard Jeni). Meanwhile, gangster Dorian Tyrell (Peter Greene), owner of the Coco Bongo nightclub, plots to overthrow his boss Niko (Orestes Matacena). One day, Dorian sends his dazzling singer girlfriend Tina Carlyle (Cameron Diaz) into Stanley's bank to record its layout, in preparation for a robbery.
Stanley is attracted to Tina, and she seems to reciprocate. Unable to enter the Coco Bongo to watch Tina perform, Stanley looks over the harbour bridge in despair thinking what to do until he finds a wooden mask near the city's harbor. Placing it on his face transforms him into a green-faced, zoot-suited trickster known as "The Mask", who is able to cartoonishly alter himself and his surroundings at will. As The Mask, Stanley indulges in a comical rampage through the city, humiliating several of his tormentors including the mechanics who gave him a faulty car.
The next morning, Stanley encounters detective Lt. Mitch Kellaway (Peter Riegert) and newspaper reporter Peggy Brandt (Amy Yasbeck), both of whom are investigating The Mask's activity of the previous night. To obtain the funds necessary to attend Tina's performance, he again dons the mask and raids the bank, inadvertently foiling Dorian's plan in the process. At the Coco Bongo, Stanley dances exuberantly with Tina, whom he ends up kissing. Following a confrontation with Dorian for disrupting the robbery and stealing his girlfriend, Stanley flees, leaving behind a scrap of cloth from his suit. Dorian and his men are arrested by Kellaway and his partner Doyle (Jim Doughan).
Based on the piece of cloth?which has reverted to a piece of Stanley's distinctive pajamas?Kellaway suspects Stanley to be the bank robber. Stanley later consults a psychiatrist (Ben Stein) who has recently published a book on masks and discovers that the object may be a creation of Loki, the Norse god of darkness, and mischief. The same night, Stanley meets Tina at a local park as the Mask, but the meeting is interrupted by Kellaway, who attempts to capture him. Stanley flees with Peggy after distracting the police (and nearby civilians) with a mass performance of the Desi Arnaz song "Cuban Pete"; she then betrays him to Dorian for a $50,000 bounty. Using the mask, Dorian becomes a malevolent green-faced monster. Dorian's henchmen force Stanley to reveal the location of the stolen money, before turning him in to the police.
When Tina visits Stanley in the station, he urges her to flee the city. Tina thanks Stanley for showing her kindness and warmth she wasn't used to and tells him he didn't need the mask to be special to her. She attempts to leave the city, but is captured by Dorian's men and forcibly taken to a charity ball at the Coco Bongo, hosted by Niko and attended by the city's elite, including Mayor Tilton (Ivory Ocean). Upon arrival, the masked Dorian kills Niko and prepares to destroy both the club and Tina with dynamite. Milo, Stanley's dog, helps Stanley escape from the station by retrieving the keys from a guard. Stanley then takes Kellaway hostage in a desperate attempt to stop Dorian.
