Stanley Ipkiss is a shy and unlucky bank clerk working at the local Edge City bank. He is frequently ridiculed by everyone around him, except for his Jack Russell Terrier Milo, and his co-worker and best friend Charlie Schumaker. Meanwhile, gangster Dorian Tyrell, owner of the Coco Bongo nightclub, plots to overthrow his boss Niko. One day, Tyrell sends his singer girlfriend Tina Carlyle into Stanley’s bank to record its layout, in preparation to rob the bank.
Stanley is attracted to Tina, and she seems to reciprocate. After being denied entrance to the Coco Bongo, he finds a wooden mask near the city’s harbor. Placing it on his face transforms him into a zoot-suited, green-faced, bizarre, wise-cracking trickster known as the Mask, who is able to cartoonishly alter himself and his surroundings at will. Stanley scares off a street gang that attempts to rob him by turning a balloon into a Tommy gun, and then he exacts revenge on his tormentors; he scares his grouchy landlady, and injures the con-artist repairmen who did unnecessary work on his car and charged him for it.
The next morning, Stanley encounters detective Lieutenant Kellaway and newspaper reporter Peggy Brandt investigating the Mask’s activity of the previous night. To attend Tina’s performance, he again becomes the Mask to raid the bank, inadvertently foiling Tyrell’s plan in the process. At the Coco Bongo, Stanley dances exuberantly with Tina, whom he ends up kissing. Following a confrontation with Tyrell for disrupting the bank robbery, Stanley flees leaving behind a scrap of cloth from his suit that transforms back into his pajamas, while Tyrell is arrested by the police as a suspect for the bank robbery.
Based on the piece of cloth, Kellaway suspects Stanley to be the bank robber. Stanley later consults a psychiatrist who has recently published a book on masks, and is told that the object may be a depiction of Loki, the Norse god of darkness and mischief. The same night, Stanley transforms into the Mask and meets Tina at a local park, but the meeting is interrupted by Kellaway, who attempts to arrest him. Stanley tricks a large group of police officers into joining him in a mass-performance of the Desi Arnaz song “Cuban Pete”, takes off the mask and flees with Peggy, but she betrays him to Tyrell for a $50,000 bounty. Tyrell tries on the mask and becomes a malevolent green-faced monster. Forced to reveal the location of the stolen money, Stanley is kept hostage in one of the mob’s cars while Tyrell’s henchmen search his apartment. With the money now in the hands of Tyrell’s gang, Stanley is then delivered to Kellaway, along with a rubber green mask, where he is arrested.