Film writer Skip Donahue and actor Harry Monroe are both fired from their jobs in New York City and leave for Hollywood. Along the way, they take odd jobs to make money. During one such job in Arizona, Skip and Harry perform a song and dance routine dressed as woodpeckers as part of a promotion for a bank. While the duo are on break, two men steal the costumes and rob the bank. However, Harry and Skip are arrested, whisked through a speedy trial and handed 125-year jail sentences. Their court-appointed lawyer, Len Garber, advises them to wait until he can appeal their case.
Life in a maximum-security prison proves difficult for Skip and Harry. After a failed attempt at faking insanity, they make friends with Jesus Ramirez, a bank robber, and Rory Schultebrand, a gay man who killed his stepfather, and meet inmates such as contrabandist Jack Graham, ax murderer Blade, and feared mass murderer Grossberger.
Strangely, while Harry is understandably scared of the aggression of the guards and inmates, Skip seems to be optimistic and content about the situation. At one point, the guards put Skip in a small, dark box for a few days of solitary confinement expecting to find him a crazy mess when they bring him out. Instead he asks them for one more day as he "was just beginning to get into [himself]".
Three months later, Skip and Harry are brought to see Warden Walter Beatty and Deputy Warden Wilson, the head guard. They wish to run a "test" with Harry and Skip on a mechanical bull in the warden's office. To everyone's surprise (and it is never explained in the film how this is possible) Skip stays on the bull even when it is set at full power. So Beatty selects him to compete in the prison's annual rodeo competition.
Jesus and Rory inform Harry and Skip of the truth behind the rodeo: it is a crooked operation run by Beatty and Warden Henry Sampson, who heads the neighboring prison. The money from the rodeo, which is supposed to go to the prisoners, ends up in the wardens' pockets. Knowing Skip will be selected as the prison's new champion, Jesus and Rory hatch a plan for escape involving Skip refusing to participate. This backfires as the warden orders Wilson to "straighten Skip out", and the guards abuse Skip and Harry. However, this too fails; as Skip continues to enjoy himself and when the guards suspend Skip from the floor with manacles in one of the cells they only succeed in fixing his bad back injury that he got from riding the mechanical bull earlier.
Harry and Skip are visited by Garber, who introduces them to his partner in the mission to prove them innocent, his cousin Meredith, to whom Skip is immediately attracted. Later, Skip meets with Beatty to make a deal. In exchange for his participation in the rodeo, Skip requests his own crew (Harry, Jesus, Rory and Grossberger), along with a larger jail cell. Beatty agrees, telling Wilson to have a guard watch them at all times. Wilson reveals to the guard, Graham, that Skip will not leave the rodeo alive.
While practicing for the rodeo, Skip, Harry, Jesus, Rory and Grossberger acquire tools they need for their escape, using the prison's metal shop to transform them into seemingly everyday items. Meredith gets a job as a waitress in a country western strip club searching for possible suspects and encounters the real crooks. She calls Garber and the police.
The rodeo begins, but attempts to kill Skip fail. During the major events, each member of Skip's team escape through a secret opening, taking them through air vents to either a restroom where Jesus' wife provides them disguises, or through a vent to a hollow pushcart manned by Jesus' brother. Once through, they put on their disguises and re-enter the grounds as audience members.
Skip is to compete against champion Caesar Geronimo to swipe the prize: a bag of money (in reality the wardens' side bet) from the horns of a large, Brahman bull. Skip asks Caesar if he is tired of being his warden's stooge, suggesting that they give the money to the prisoners and offering to help Caesar win if he agrees to do so. Both contestants play hard, but Caesar wins. Inspired by Skip, Caesar throws the bag to the inmates. Skip prepares his escape through the secret opening, but Graham shows up, suspicious. Grossberger knocks Graham out and Skip escapes into the pushcart. The group drives off.
At a secret meeting spot, Jesus and Rory bid Harry and Skip farewell as they pile into a car, heading off to Mexico. Harry and Skip get in the other car, only to be stopped by a car containing Garber and Meredith. She tells Harry and Skip that the police have captured the real crooks. Harry and Skip decide to resume their original plan of heading to Hollywood. Skip asks Meredith to go with him, and Meredith agrees.Gene Wilder as Skip Donahue
Richard Pryor as Harry Monroe
Georg Stanford Brown as Rory Schultebrand
JoBeth Williams as Meredith
Miguel Ángel Suárez as Jesus Ramirez
Craig T. Nelson as Deputy Ward Wilson
Barry Corbin as Warden Walter Beatty
Nicolas Coster as Warden Henry Sampson
Joel Brooks as Len Garber
Jonathan Banks as Jack Graham
Erland Van Lidth as Grossberger
Franklyn Ajaye as Young Man in Hospital
Cedrick Hardman as Big Mean
Luis Ávalos as Chico
Grand L. Bush as Slowpoke
Herbert Hirschman as Man at Dinner Party
Mickey Jones as Guard #8
Billy Beck as Flycatching Prisoner
Lee Purcell as Susan
The film was shot in Manhattan, New York; Burbank, California; Florence, and Tucson, Arizona in 56 days from February 15 to April 11, 1980.
The movie received mixed to positive reviews. Stir Crazy currently has a 67% approval rating on Rotten Tomatoes It was a box office success, grossing $101,300,000, and being the third-highest-grossing film of 1980, behind The Empire Strikes Back and 9 to 5.
The box office total marked the first time a film directed by an African-American earned more than $100 million.
The film was nominated for a Razzie Awards for Worst Supporting Actress for Georg Stanford Brown in drag.