For years, the North African Republic of Wadiya has been ruled by Admiral General Hafez Aladeen (Sacha Baron Cohen), a childish, lecherous, anti-western and antisemitic despot who surrounds himself with female bodyguards, refuses to allow Wadiyan oil to be sold internationally and is working on developing nuclear weapons. After the United Nations Security Council resolves to intervene militarily, Aladeen travels to the UN Headquarters inNew York City to address the council. Shortly after arriving, he is kidnapped by Clayton (John C. Reilly), a hitman hired by his treacherous uncle Tamir (Ben Kingsley). Tamir then replaces Aladeen with a mentally-challenged political decoy named Efawadh, who he intends to manipulate into signing a document democratizing Wadiya and opening the country’s oil fields for business. Aladeen escapes, but his huge beard has been shaved off by Clayton, making him practically unrecognizable. He encounters activist Zoe (Anna Farris), who offers him a job at her alternative lifestyle co-op. Aladeen refuses the offer and travels to New York’s “Little Wadiya”, which is populated by refugees from his country. There, he encounters “Nuclear” Nadal (Jason Mantzoukas), the former chief of Wadiya’s nuclear weapons program and head procurer of women, whom Aladeen thought he had previously executed. Nadal explains that Wadiyan rebels infiltrated his intelligence unit, sending into exile all the people he had ordered to be executed.
Wanting his old job back, Nadal promises to help Aladeen thwart Tamir’s plot and regain his position as ‘rightful’ dictator, on condition that Aladeen makes him head of Wadiya’s W.M.D. program again. Aladeen agrees and accepts Zoey’s job offer, as she is catering at the hotel where the signing is to occur. Aladeen falls in love with Zoe after she refuses his sexual advances and teaches him how to masturbate. Turning around Zoe’s struggling business, Aladeen begins imposing strict schedules on everyone, forming a personality cult around Zoe and intimidating an inspector into giving the store a good review. However, Aladeen’s relationship with Zoey becomes strained after he reveals his true self. After acquiring a new beard taken from a corpse, Aladeen infiltrates the hotel and incapacitates Efawadh. At the signing ceremony, he tears up Tamir’s document in front of the UN delegation, and holds an impassioned speech praising the virtues of dictatorship, drawing unintended parallels to current issues within the United States. However, upon seeing Zoe in the room, he declares his love for her and, knowing Zoey’s strongly-held views, vows to democratize his country and open up Wadiya’s oil fields for business, but in a way where the general populace will benefit. Angry with Aladeen staying in power, Tamir attempts to assassinate him but Efawadh jumps in front of the bullet.