Walter Mitty (Ben Stiller) is in his apartment going over some of his latest and upcoming expenses. He then opens up his laptop to go on eHarmony to check out the profile of his pretty co-worker Cheryl Melhoff (Kristen Wiig). Her profile states that she is looking for a man who is adventurous, brave, courageous, and is employed. She likes her sister and mystery novels, and she dislikes her sister and internet dating. She also has a three-legged dog and a son. Walter wants to send her a wink, but he is hesitant to do so. He inches his finger over the button on his keyboard, but he is too nervous. He finally clicks to send the wink but the computer is unable to perform the request. Walter clicks a few more times but only gets the same response. Frustrated, he shuts his laptop and leaves.
While waiting at the train station, Walter calls eHarmony and speaks to a representative named Todd (Patton Oswalt) about not being able to send Cheryl a wink. Todd points out that Walter left most of his profile blank, especially the "been there, done that" sections. Walter admits that he's never really been anywhere noteworthy or mentionable. Todd asks if he's done anything noteworthy or mentionable. Suddenly, Walter hears a dog barking in the distance. He runs off and leaps right into an apartment window. Merely seconds later, he runs out with a three-legged dog right before the building explodes. Cheryl then runs in seemingly out of nowhere. Walter hands her the dog and hands her a prosthetic for the dog. She exclaims, "God, you're noteworthy!" However, this was just a fantasy Walter had as he zoned out for a moment while Todd was still on the line. He also misses his train.
Walter goes to his job at Life magazine. His sister Odessa (Kathryn Hahn) is there to give him clementine cake for his birthday, and also to remind Walter to go help their mother move a piano into her new apartment. She adds that she's going to audition for the role of Rizzo in a production of "Grease". Walter leaves her to find his co-worker Tim (Jon Daly) telling him that the company has been acquired. They meet the new boss, Ted Hendricks (Adam Scott). He's a smug jerk and he's got a really thick beard. Ted makes a crack at Walter when Water tells him that his job is a negative assets manager. Walter imagines making a joke to Ted about his beard which Tim and another co-worker laugh heartily at.
When he gets up to his floor, Walter sees Cheryl. She says "Hey" in his direction, to which he responds back. She asks "How was your weekend?" but before he can reply this time, a woman walks from behind him to answer Cheryl's question. While getting his coffee, Walter overhears Cheryl telling her friend that she bathed in Antarctic water and spent time with her Latin lover. Walter jumps into a fantasy in which he meets Cheryl after doing some mountain climbing. He also sports long hair and a Hispanic accent to woo her. Ted and his buddies see Walter staring off into space. Ted mockingly quips, "Ground control to Major Tom!" He flicks a paperclip at Walter's neck to get his attention, snapping him out of his daydream.
Walter goes to his work area with his friend and co-worker Hernando (Adrian Martinez). They have received a package from famed photographer Sean O'Connell (Sean Penn). It contains a bunch of negatives and a note from Sean, thanking Walter for his work and to tell him that negative 25 is special because it represents the "quintessence of life". There is also a wallet in there with Life's motto engraved - "To see things thousands of miles away, things hidden behind walls and within rooms, things dangerous to come to, that is the purpose of life." Unfortunately, Walter cannot find negative 25 among the other negatives.
Ted and his guys are making the announcement to the rest of the employees that the company is downsizing and that the next issue of Life will be their last. They plan to use negative 25 as their last cover, as requested by Sean. As Walter comes up, they ask him for the negative, but Walter makes an excuse to cover for the fact that he doesn't have it.
Hernando makes a blowup of the negatives to find clues as to where the missing negative is. All he and Walter can make out is a thumb with a ring on it, and some water. Later, Walter finally gathers up the nerve to speak to Cheryl and tells her that he cannot find the negative. He asks her if she knows of any way to contact Sean, but he's so off the grid that it's impossible to reach him, though she says she will talk to someone who can help.
Walter goes to his mother Edna's (Shirley MacLaine) apartment to see that they need to put the piano in with a crane. While he and Odessa help their mother unpack some stuff, Odessa gives Walter an old Stretch Armstrong toy that he used to play with. They find their father's travel journal that he gave to Walter before he died. They also find photos of Walter and his dad when he was a kid, sporting a mohawk.
Walter goes back to work and gets in the elevator, right as Ted enters as well. Ted makes fun of his Stretch Armstrong, leading Walter to envision a crazy action sequence in which he throws himself and Ted out of the elevator. They both land in a garbage truck, and Ted flies off with Stretch. Walter chases after him, and the two zoom through the city as if they had superpowers. Walter then snaps out of it as Ted is poking his forehead.
Walter shows Cheryl the developed pictures of the thumb and the water to check for clues. They spot what appears to be a word that is unclear to make out. Walter also has a daydream about showing Cheryl a statue he made of them dancing.
Later, Walter goes walking with Cheryl to pick up her son Rich (Marcus Anturri). He's into skateboarding, so while Cheryl is on the phone, Walter shows off some skate moves that impress Rich. After Cheryl hangs up, she tells Walter that Sean can be found in Greenland. She then gets a phone call from her ex-husband, making a crack that maybe he fell down a well. After hanging up again, Walter fantasizes that Cheryl admits her love for him. For some reason, he imagines that he has the "Benjamin Button" case where he ages in reverse, leading to him imagining them growing old together, but he is really an old geriatric baby. When he snaps out of it, Cheryl is walking away. She thinks he's bored with her story about her broken refrigerator, but he says he wasn't.
With the pressure riding on him from Ted, Walter considers taking on the task of finding the negative himself. He sees a black-and-white picture of Sean, which, in Walter's head, comes to life with Sean beckoning Walter. This gives him the inspiration to go forth and fly to Greenland. He arrives in the town of Nuuk and rents a little red car. He drives to a bar where items are mailed from. The bartender tells Walter that items are mailed via a helicopter. After he orders a drink, a large and drunken man (Olafur Darri Olafsson) walks over to Walter and asks him to join him in singing "Don't You Want Me" by Human League. Walter refuses until he starts singing weakly. The man tells him that his singing sucked, and he starts harassing Walter. This escalates into a bigger fight, with the man nearly attacking Walter with a broken cup, until Walter notices the man's thumb, which has the same ring as in one of Sean's pictures. When the man calms down, he tells Walter that he has a helicopter that can take him to a boat for him to radio Sean. Walter sees that the man is too drunk and refuses to follow him. When the man leaves, Walter fantasizes about Cheryl playing the guitar and singing "Major Tom" to him. This pushes him to run after the helicopter as the man starts to take off. Walter hops on right at the last second, the adrenaline noticeable in his face.
The drunken man flies Walter over the sea above a fishing vessel. He hands Walter a box with radio components and tells him to jump onto the smaller lifeboat. Walter doesn't realize that until after he's jumped. He lands in the water and drops the components, which sink to the bottom of the ocean. To make things worse, a shark is swimming nearby. He hits the shark with his briefcase and is pulled out by the fishermen. They give Walter clothes to change into. One man gives him some clementine cake that was given to them by Sean. The wrapping paper it came in has "Eyjafjallajokull" written on it. This is a volcano in Iceland, which Walter must now go to.
The boat takes Walter to Iceland, and he is informed that there is only one bike for him to travel on. He races there against the horny Chilean sailors who want to find a strip club. Walter rides his bike across the land, soaking in the landscape. He gets a call from Todd, and Walter tells him that he just jumped out of a helicopter and fought a shark. Todd is surprised to find out this really happened, even more so when Walter says he's headed toward a volcano. He spots a flock of birds that he imagines forming Cheryl's face in the sky. Without looking, Walter rides into a pole, damaging the bike's chain. He walks until he finds a group of kids with a longboard. He trades them his Stretch Armstrong for the longboard. He asks a local for directions to Eyjafjallajokull and rides the longboard there, tying rocks to his hands so he can make smooth turns on the road. Once he gets there, the sirens go off as the volcano is about to erupt. The local drives to Walter and picks him up, just as a plane flies overhead with a man taking a picture of the eruption. Walter knows this is Sean. He hops in the man's car and they speed away from the volcano.
The local takes Walter to a Papa John's so he can stay at the motel nearby. He calls Cheryl and tells her of the other three words that Sean wrote on the wrapping paper. She tries looking them up online but finds nothing. She adds that people are already being let go at work. Walter then mentions that he used to work at a Papa John's after his dad passed away, and mentions his mohawk as a child. Cheryl seems charmed by the story before they hang up. Walter then gets a text from Hernando, who says that Ted just fired him.
Walter goes back to New York and finds many pictures and frames being taken away. Hernando tells him that they shut down two floors. Ted approaches Walter and demands the negative. Walter admits he cannot find it, and he is subsequently fired.
Walter goes to Cheryl's place to give Rich the longboard. When he gets to the door, a man answers. It's Phil (Kai Lennox), Cheryl's ex-husband. He asks for Cheryl, but when Phil goes to get her, Walter just leaves the longboard outside and walks away, heartbroken. He gets in a cab and imagines himself on Conan (with cameos from Conan O'Brien and Andy Richter) talking about his love life. Walter gets out when the cabbie says the show stays on.
Walter goes to his mother's home. There are guys who helped move the piano in, so Odessa tells him to give them a tip. He hands her the money and chucks the wallet from Sean in the garbage. While looking at one of his pictures, he notices a chip in the wood of the picture. He spots the piano, which has the exact same chip. Walter asks Edna if anybody took a picture of the piano, and Odessa says that Sean did. Edna tells Walter that Sean got the clementine cake from her, and that the words on the wrapping paper meant that he was going somewhere were warlords are involved to photograph snow leopards. Walter looks up the words on Google and concludes that Sean is in Ungoverned Afghanistan, specifically to the Himalayas. Edna inspires her son to finish the job as Sean would want.
Walter travels to Afghanistan through Yemen. He hires two old men to guide him to the Himalayas, finally making use of his dad's travel journal. He gives the warlords a piece of clementine cake, which they love. The guides take Walter as far as they can until he has to walk alone. Todd calls him again and says his profile is building up pretty well, but that Cheryl is no longer using the site. Walter says he has to hang up as he's climbing the mountain. That's when he finally runs into Sean himself. He is quietly trying to take a picture of a snow leopard. Walter asks him where the negative is, and Sean replies, "You're sitting on it." The negative was always in the wallet that Sean sent, placed in a little slot. He thought his cryptic message would give Walter a hint, because he thought it was "cute". Walter regretfully admits he threw the wallet away (this hurts Sean's feelings). The negative is now lost for good. Sean returns his attention to the snow leopard, but decides not to take a picture because he is enjoying the moment and doesn't want to be distracted with the camera. Sean then spots a group of men nearby playing soccer. He thinks it looks like fun and invites Walter to join them. Walter decides to go down and have some fun.
On his way back home, Walter is detained in Los Angeles. He doesn't know anybody there who can vouch for him, until he thinks of one person: Todd! He goes down to the airport in person, and the two finally meet. They grab a snack at Cinnabon. Todd tells Walter that his profile received 300 winks within 2 hours. Walter says he's probably going to get off the site as well since Cheryl is no longer active.
Walter returns home to sell his mother's piano. He is apologetic but she is okay with it. He is given a check for the piano, which Edna says he should put in his wallet. Walter says he threw it out, but she saved it from the garbage. As he leaves, Walter checks the little slot, and he finally finds a tiny envelope containing the negative. He takes it down to his former workplace to find Ted in a meeting. Walter hands them the negative and stands up for the people he's worked with. He also calls Ted out on being a dick. On his way out, he bids Hernando goodbye.
Walter goes to a coffee place to build up his resume on Career Builder, listing all of his recent adventures. He gets an email from Rich, thanking him for the longboard. Attached is a video recorded by Cheryl where Rich is trying out the longboard himself. Both he and Cheryl say hi to Walter in the video.
After picking up his last paycheck, Walter runs into Cheryl again. He admits to her the fantasies and daydreams he's had of her, including her singing "Major Tom" to him. When he says he thought she had gotten back with Phil, Cheryl says he was only there to fix her fridge. Walter invites her to go check out Odessa's performance in "Grease", which Cheryl accepts. As they walk away, they come across a newsstand. The last issue of Life hits the stands on this day, and they finally get to see what the picture was - it's a black-and-white picture of Walter himself sitting in front of the Time and Life Building holding a negative sheet, with a dedication to the people working at Life on the side. Cheryl asks if Walter wants to buy a copy, but he says maybe later since he didn't want to look uncool buying one so soon. He then takes Cheryl's hand as they continue walking.
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