The movie begins with a brief news report of the fictional North African country, Wadiyah. The dictator is General Aladeen (Sacha Baron Cohen), who has inherited the position from his father. He has the country in his thrall, having been born with a full beard and pubes, winning his self-named Olympics and changing various words to his last name, Aladeen (for example, the words "positive" and "negative" are both replaced with the word Aladeen. A man both laughs with relief and cries in sorrow after he is told that he is "HIV Aladeen"). He is brutal, giving a quick hand signal to order the execution of any person who displeases him. He issues a speech stating that they are enriching uranium for "peaceful" purposes, but cannot keep a straight face while doing it. Shortly after, we follow Aladeen as he goes to a secret science compound full of livestock. He meets his uncle Tamir (Ben Kingsley). It is revealed that Tamir was in line for the throne until Aladeen's dad installed Aladeen. It is also revealed that Aladeen promised his father he would never open the country's vast oil reserves to the world markets.
They tour the science facility and Aladeen asks to see their missile. Rising up from the floor comes a missile with a pointed tip, that is also only 3-4 feet tall. When Aladeen asks why the missile is so puny, his head scientist reminds Aladeen that he had ordered their only nuclear expert killed (and for reminding Aladeen of that fact, the scientist is ordered dead by his hand signal). We flash back to a prior visit to the facility where Aladeen is shown a massive atomic bomb by his nuclear expert Nadal (Jason Mantzoukas). Aladeen is upset that the cone of the missile is circular and not pointy like it is in the cartoons he watches. Nadal belittles Aladeen and is ordered killed, as a result.
As Aladeen departs his car when he returns from the facility, he is shot dead by one of his servants. It is later revealed, however, that the servant actually shot Aladeen's double. Aladeen says that he doesn't think his double will recover, and orders the obviously dead man killed as he walks out of the room. Tamir shakes his head and makes a phone call, saying that they have killed the wrong Aladeen but will try again in the near future. Tamir also orders the guards to find a new double for Aladeen, and they find a borderline retarded goat-farmer for the job. We next see Aladeen in bed with Megan Fox. After he finishes he asks if they can cuddle, but she clearly is in a rush to leave as she needs to meet the Italian Prime Minister (probably to provide the same services she just gave Aladeen). She is disappointed that she didn't get the same payment as Katy Perry, but Aladeen says that Perry let him "Aladeen" on her face. After she leaves, he puts a picture of Megan Fox on the wall with other celebrities he has slept with, including Oprah, Halle Berry, and Arnold Schwarzenegger. He then gets into bed to cuddle with his pillow.
The next morning, Tamir informs Aladeen that if he does not report to the UN to explain his nuclear program, they will invade and depose him. Aladeen seems unintimidated as he plays Wii games based on tragedies such as the Munich Olympics. Aladeen agrees to go to New York to visit the UN.
Once Aladeen gets there, he leads an opulent parade to his hotel. Although he has rented out their most expensive room, he is angered that he must pay another $20.00 for the internet. Tamir introduces Aladeen to his extra security guard Carmine (John C. Reilly). Carmine believes that anyone not from the US is an "A-Rab" and has contempt for them all. In the middle of the night, Carmine comes into Aladeen's room and abducts him. Carmine says he has been paid to kill Aladeen, but will torture him for free, as well. Aladeen points out how each of Carmine's torture tools are outdated and that the Arab world has much more updated devices. Carmine gets mad and decides simply to kill him, but first shaves off Aladeen's beard so that nobody could identify the body. Seeing that Aladeen is tortured at losing his beard, he lights it on fire, accidentally setting himself on fire. As Aladeen flees the burning building, he yells that he will "get some help, jk."
Aladeen takes clothes from a homeless man and goes to the UN to give his speech, but nobody recognizes him. He sees his double and Tamir riding in a car together, and figures out that Tamir has betrayed him. He begins chanting that his double is not the ruler - inspiring the protesters to rally around him. One protester, a new-age hippie named Zoey (Anna Farris) takes a special liking to him. Aladeen watches as his double causes havoc throughout the UN assembly room - walking past the podium, drinking the entire pitcher of water, refilling the pitcher with his urine and drinking it, and then spilling his urine on the Israeli delegates (which Aladeen approves of). Eventually, the double reads a speech prepared by Tamir in which he pledges to transition the nation into a democracy and open the oil fields to international business. We find out that Tamir struck a deal with oil barons from the US, UK, Russia, and the leader of the group from China Mr. Lao (Bobby Lee). In exchange for opening the country, Tamir will get 30% of their profits. Mr. Lao advises Tamir that he use his wealth to hire famous actors to give him head - and explains that it is a great power trip and that everyone has a price.
Aladeen is driven by Zoey back to her liberal, vegan, transgendered (or no-gendered), feminist grocery store where she employs refugees from dictatorships, obviously believing that Aladeen is a political dissident. Aladeen introduces himself as Allison Burgers (a name he got from looking at signs during the ride). When he meets the other employees, he mocks them, calling one woman who lost her hands in war "Captain Hook" and an african refugee as "Blackie." He is also repulsed to discover that Zoey is actually a woman with armpit hair - calling her a "hobbit" and "little boy." He refuses her offer of employment and storms out.
Aladeen arrives at a Wadiyah restaurant, but after he walks in, he discovers that it is very anti-Aladeen. He also begins to recognize patrons as people he had ordered killed in Wadiyah (one was killed for accidentally getting in his way, another was killed for getting the toy in the bottom of Aladeen's cereal box). The patrons begin to recognize him, and though he tries to give them more false names like "Laddie S'Batrhum" (from the sign saying Lady's Bathroom) and "Max Imamcapacitay277" (from the elevator sign Maximum Capacity 277), they don't believe him. Suddenly, his former nuclear expert Nadal emerges from the crowd and claims Aladeen as his idiot cousin.
Nadal explains that Aladeen's executioner was a member of the resistance and that all people ordered killed were actually sent to NYC. Nadal explains that he now works for the Mac Store... cleaning sperm out of keyboards. Nadal offers to help Aladeen regain his throne if Aladeen reinstates him in his old job and to build a bomb with a circular nose cone. Aladeen agrees. Nadal says they will scope out the hotel, obtain a new beard, and that Aladeen must work for Zoey since her grocery store is catering lunch for the UN and he can gain access to the building.
Aladeen returns to Zoey's store and apologizes (and she mistakes his insults for jokes, like when he says educated women are as cute like monkeys riding bicycles). She gives him a job, and he is terrible. He slaps insolent customers, kicks a disrespectful kid, and throws the trash into the streets. He and Nadal go on a helicopter flight to get a good view of the hotel and surrounding area. They attempt to pretend to be Americans (Aladeen had won Wadiyah Golden Globes at a ceremony where he chose the winner) and are completely unconvincing. While Aladeen is explaining to Nadal in their native language that Osama Bin Laden is still living in his guest house (the US having killed his double) and is constantly clogging the toilets, the others in the helicopter are convinced the two are terrorists, and they are arrested.
Zoey comes to bail Aladeen out and she launches into a rant against the police officers who "unjustly" arrested him. Aladeen is impressed with her fury and becomes attracted to her. When they return to the store, he attempts to offer her his penis as thanks, and she tells him to masturbate. He has never done it before, so she talks him through the process. He becomes a happier man, now that he has found his "hand vagina." Zoey confides in him that they lost the UN catering contract because someone assaulted a delegate's son in her store and the employees are undisciplined and that the contract has gone to a large grocery chain. Aladeen promises to get the store in working order, employing the same tactics he used as a dictator to get the store running smoothly.
Meanwhile, Nadal finds a dead man in the obituary whose beard looks just like Aladeen's. The two attend the funeral (where it is discovered that Aladeen molested many of the members of the band Menudo) and Nadal ends up decapitating the corpse and the two flee from an angry mob with his head. Nadal shaves the beard, but Aladeen uses the head to play various practical jokes on Nadal (putting the head in bed and shower with Nadal). Nadal also realizes that Aladeen is falling for Zoey. At the store, a customer says that Aladeen is a "nice man," a compliment he has never heard of before. Zoey's grocery also gets the contract back after the decapitated head is found among the cantaloupes in their large competitor's store. Meanwhile, Tamir tries to please the double by sending in prostitutes to please him, though the double has no idea how to handle them. Eventually, the double ends up milking the prostitutes' breasts into a bucket.
Aladeen's initial plan was to break into the hotel, kill his double, and rip up the Constitution that has been written in front of the UN, but his feelings for Zoey has caused him change his mind. A woman goes into labor at the grocery store and Aladeen, as the former chief surgeon of Wadiyah, offers to deliver it. After he accidentally sticks his hand up the wrong hole several times, he and Zoey reach into the birth canal together to retrieve the baby. At that moment, Zoey realizes she also loves Aladeen, and they hold hands in the woman's uterus. Eventually the baby is delivered, but when Aladeen discovers that it is a girl, he suggests they "throw it away."
Later that night, Aladeen and Zoey begin making out and cuddling on the store's rooftop. Aladeen finishes in 30 seconds before their clothes are even off. He decides to pleasure Zoey instead, even sucking on her armpit hair. In the throes of passion, he admits to Zoey that he is Aladeen, and she rejects him and kicks him out of her store. Aladeen stands on the edge of a bridge, ready to leap off to his death when Nadal finds him. Nadal says that Aladeen is the greatest dictator and the world needs him (Nadal is also shocked Aladeen now uses Yiddish phrases like "chutzpah" and "schmuck"). Aladeen is reinvigorated saying that he will return to power and that all child laborers and slaves from Vietnam to Zimbabwe will praise him with the words "oppressed at last, oppressed at last, thank god oppressed at last."
Nadal has built a grappling hook and shoots it into the room of Aladeen's double. Although the double's goat eats through the zip line, Aladeen makes it into the double's room (only after he poops on the people on the street below and reveals his private parts to the other residents of the building). Once inside, the double says that he is happy to see the supreme ruler again, and Aladeen decides not to kill him. Aladeen attaches his newly acquired beard and is brought by Tamir to the UN. While at the UN, we see Mr. Lao and Edward Norton walk out of a bathroom, with Norton wiping his mouth and Mr. Lao saying that he will be after Viggo Mortensen next. Mr. Lao also mocks his wife for pretending to know English when she has no idea what anyone is actually saying.
In front of the UN, Aladeen rips up the Constitution and exposes Tamir's murderous plot. Tamir is taken into custody as Zoey runs into the UN to confront Aladeen. Aladeen begins criticizing democracy, stating that dictatorships are much better because dictatorships allow for "the top 1% to avoid paying taxes, allow the same parties to remain in power perpetually, allow only one person to own almost all media" and other benefits that are actually present in democracies. Then, Aladeen sees Zoey and changes his tune, saying how he loves democracy (using Zoey as the embodiment of democracy). He then says the former Constitution was only a way for oil companies to control Wadiyah, but that he will create a new Constitution and hold free elections.
Aladeen and Zoey embrace passionately, and she promises to shave her armpits for him. Tamir manages to free an arm and take a shot at Aladeen, whose double leaps in front of him and takes the bullet. The double survives the attack since he was just shot in the brain, an organ that is wholly unimportant for him.
We then fast forward a few months. We see that Aladeen has won the election with 98% of the vote (tanks are seen forcing voters into pro-Aladeen lines from the opposition lines). Having been re-elected, "Prime Minister, General Aladeen" is marrying Zoey (we also catch a glimpse of Osama Bin Laden in the window of the guest house with a plunger). After they kiss, Zoey stomps on a glass and says mazel tov before telling Aladeen she is Jewish. He says it doesn't matter, but as they hug he makes the hand signal ordering her death.
As the credits roll, we see the following scenes:
Zoey and Aladeen on a morning talk show (Zoey, apparently, was not disposed of after all) and she admits she is pregnant. Aladeen asks if it is a boy or an abortion.
Aladeen goes to the nuclear facility where Nadal states that they have completed the atomic bomb with a pointy nose cone, but Aladeen says the shape of the nose cone doesn't matter
Aladeen stopping military marchers in midstride so he can watch a video of a squirrel water skiing on his smartphone
Aladeen accidentally shoots a servant when his gun safety is set to "Aladeen" instead of "Aladeen" (obviously the words "on" and "off" have both been replaced with "Aladeen")
We then see Aladeen attempting to have a servant help him take a dump (earlier in the film, he said that the stress of being a dictator made his bowel movements extra hard and irregular).
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