Walter Black, a deeply depressed CEO of a failing toy company, struggles to improve his personal and professional life. His mental state leads to a rift with his family, causing his wife Meredith to take their two sons, Porter and Henry, and leave him. Walter's depression reaches a critical point until he discovers an old hand puppet in the form of a beaver in a dumpster. He starts using the puppet to communicate, adopting a Cockney accent and attributing all his thoughts and feelings to "The Beaver." This unusual coping mechanism strangely revitalizes Walter, allowing him to reconnect with his family and function more effectively at work.

As Walter’s bond with "The Beaver" deepens, it begins to overshadow his sense of self. Meanwhile, Porter, the eldest son, battles his own emotional issues, fearing he shares his father's mental instability. He distances himself from Walter and navigates a budding relationship with a classmate, Norah, while ghostwriting papers for fellow students. Walter's journey with "The Beaver" starts promisingly but becomes increasingly problematic as the puppet's influence intertwines with his identity, leading to unforeseen consequences for both himself and his loved ones.