In 1981 San Francisco, Chris Gardiner (Will Smith) invests his entire life savings in portable bone-density scanners which he demonstrates to doctors and pitches as a handy quantum leap over standard X-rays. While he is able to sell most of them, the time lag between the sales and his growing financial demands enrage his already bitter and alienated wife Linda (Thandie Newton), who eventually leaves him and moves to New York. After Linda bluntly says she is incapable of being a single mother, she agrees that their son Christopher (Jaden Smith) will remain with his father.
While downtown trying to sell one of the scanners, Chris meets Jay Twistle (Brian Howe), a manager for Dean Witter and impresses him by solving a Rubik's Cube during a short taxi ride. Chris does not have enough money to pay the taxi driver, so he escapes, resulting in the taxi driver chasing him into a subway station, screaming and shouting for his money along the way. Chris boards a train but loses one of his bone scanners in the process. This new relationship with Twistle earns him the chance to become an intern stockbroker. Despite arriving at his new office unkempt and shabbily dressed due to being arrested the previous day for unpaid parking tickets (and having had to paint his apartment, as his landlord grudgingly says he will give Chris and his son a little more time living there if they get the place ready for an incoming tenant before they depart), Chris is offered the internship.
Chris is further set back when his bank account is garnished by the IRS for unpaid income taxes, and he and his young son are evicted. Chris becomes broke and has less than thirty dollars in his bank account. As a result they are homeless, and are forced at one point to stay in a restroom at a subway station. Motivation drives him to find the Glide Memorial United Methodist Church, which has a homeless shelter for single mothers and their children. The church's owner will not allow him to stay there and Chris will not agree to leave Christopher there alone, although she tells him about a local church that also provides shelter, but has very limited space. Due to demand for the limited rooms, Chris must frantically race from his internship work early each afternoon in order to land a place in line.
Chris finds the bone scanner that he lost in the subway station with an insane man who had been carrying it around, believing it to be a time machine, and the scanner is now damaged, but Chris finally repairs it and is able to sell it. Disadvantaged by his limited work hours, and knowing that maximizing his client contacts and profits is the only way to earn the one paid position that he and his 19 competitors are fighting for, Chris develops a number of ways to make phone sales calls more efficiently. He also reaches out to potential high value customers, defying protocol. One sympathetic prospect who is a top-level pension fund manager even takes him and his son to a San Francisco 49ers game. Regardless of his challenges, Chris never reveals his lowly circumstances to his co-workers, even going so far as to lend one of his bosses five dollars for a cab, a sum he can't afford. Concluding his internship, Chris is called into a meeting with his managers. One of them notes he is wearing a new shirt—and then smiles and says he should wear it again tomorrow, letting him know he has won the coveted full-time position. Fighting back tears, he rushes to his son's daycare, hugging him. They walk down the street, joking with each other and are passed by a man in a business suit (the real Chris Gardner in a cameo appearance). The epilogue reveals that Chris went on to become a successful man and to form his own multi-million dollar brokerage firm.