This quirky, wistful comedy from writer/director Wes Anderson chronicles the misadventures of a family of geniuses living in a surrealist version of New York City. Chas (Ben Stiller) is a business whiz whose life implodes after the accidental death of his wife. Richie (Luke Wilson) is a natural-born athlete who turns his back on professional tennis for mysterious reasons. Meanwhile, their adopted sister Margot (Gwyneth Paltrow), a gifted playwright, is depressed and about to divorce her neurologist husband, Raleigh (Bill Murray). One by one, the grown Tenenbaum children retreat from the world and take up residence back home with their mother, Etheline (Anjelica Huston).
Royal Tenenbaum (Gene Hackman), the selfish, rascally patriarch of the family, also returns to the house, years after separating from Etheline. He claims to be dying of cancer, but it soon becomes apparent that he's only returned because he's low on money and has nowhere else to go. Moreover, he plans to win back the affections of his estranged wife, who's fallen for a shy co-worker (Danny Glover).
Tensions run high with all the eccentric family members gathered together under the same roof again for the first time in years, especially when Eli (Owen Wilson), a troubled former neighbor, reveals he's been having an affair with Margot.
But as the previously isolated family members reconnect, they gradually realize how much they've missed one another. Free-spirited Royal helps Chas to see how overly protective he's been with his children since the death of their mother. Margot's depression lifts when her childhood confidant, Richie, admits that he's always loved her, and abandoned his career in dismay when he learned of her marriage to Raleigh.
As for Etheline, she just wants happiness for her children and closure with Royal, and by the end of Anderson's whimsical adult fairy tale, her wishes have all come true.