Though Elizabeth (Phoebe Cates) discovers that her husband, Charles (Tim Matheson), is cheating on her, she finds it hard to let go. Her friend Janey (Carrie Fisher) supports her during this time, but she is unable to look past her love for Charles. Suddenly, Fred (Rik Mayall) appears: her old childhood imaginary friend, in an effort to cheer her up. She moves in with her mother (Marsha Mason) who wants her to stay with Charles and be exactly like her. Fred stays with Elizabeth as she tries to win Charles back. However, though Elizabeth is happy to have her careless childhood friend back, she begins to question if his presence is causing more trouble than it's worth.