During World War I, an anonymous private, (Chaplin) fighting in the army of Tomania, effects the valiant rescue of an officer named Schultz, but suffers loss of memory when the plane in which they are flying crashes into a tree. The little soldier is sent to a hospital where he remains for the next 20 years, unaware of the changes that are taking place around him. He does not know, for instance, that Hynkel (also played by Chaplin) has become Dictator of Tomania, and is ruthlessly persecuting the jews with the help of his two ministers, Garbitsch and Herring.

Dismissed at last from the hospital, the amnesia victim returns to his barber-shop in the Ghetto, expecting to find everything as he left it 20 years before, because he does not realize that he has been away for so long. He is surprised and hurt, therefore, when Hynkel`s storm-troopers smash his store windows and make his new life miserable. He finds a friend in Hannah, a beautiful daughter of the Ghetto, and before long their friendship ripens into love.

For a while they enjoy comparative peace firstly when Schultz, who has risen to a position of prominence in the new regime, recognizes the barber as his friend and orders the storm troopers to leave him alone, and secondly when Hynkel needs a financial loan from a Jewish financier and ceases temporarily his persecution of the Jews.

The financier refuses the loan, so Hynkel takes up his antisemitic activities again, with a vengeance. He is planning an invasion of the neighboring country of Osterlich, and when Schultz questions the judgement of this move, the Dictator condemns him to a concentration camp. Schultz manages to escape to the ghetto, where he attempts to incite a revolution against the government. But before he can carry out this plan he and the barber are both captured and interned in prison camp.

Pursuing his project of invading Osterlich, Hynkel invites to his palace Napaloni, Dictator of Bacteria, and after a few comic misunderstandings is able to enlist him as an ally. The invasion is successfully completed and Hannah, who has fled with her friends to Osterlich, again finds herself under the domination of Hynkel`s cruel regime.

While The Great Dictator is celebrating his latest conquest by taking a vacation in the country, Schultz and the barber escape from the concentration camp. In the search that follows, Hynkel is arrested by his own soldiers, who think he is the barber, and Schultz sees that the barber is mistaken for the Dictator. Realising the importance of his new position the barber carries out the masquerade and in a speech before the assembled crowds of Tomania, denounces everything that Hynkel stands for and makes a rousing plea for democracy.