The film is set in an alternative reality in which lying does not exist. As a consequence of this premise, religion does not exist.
Mark Bellison (Ricky Gervais) is a screenwriter, in a film industry limited to historical readings because there is no fiction. One night he has a date with the beautiful and wealthy Anna McDoogles (Jennifer Garner). She tells Mark she is not attracted to him, because of his looks and failing financial situation, but is going out with him as a favour to his best friend Greg Kleinschmidt (Louis C.K.).
The next day Mark is fired from his job because of the lack of interest in his films, and his landlord threatens to evict him for not paying his rent. Crestfallen, he goes to the bank to close his account. The teller informs him that the computers are down, and asks him how much money he has in his account. Mark has an epiphany that enables him to tell the world's first lie, to the effect that he has $800 — the amount he owed his landlord — in his account. He then lies in a variety of other circumstances, such as preventing a police officer (Edward Norton) from arresting Greg for drunk driving and stopping his depressive neighbour Frank Fawcett (Jonah Hill) from committing suicide. He realises that lying can be used for helping others rather than personal gain, and writes a screenplay about the world being invaded by aliens in the 14th century, in which it is claimed that everyone's memories were erased. He becomes wealthy from the film's success.
Mark convinces Anna to go out with him again; she congratulates Mark for his financial success and admits that he would be a good husband and father, but she is still not attracted to him. Mark then gets a call that his mother has had a heart attack and rushes to the hospital. There, the doctor (Jason Bateman) tells him that his mother is going to die. She is scared of death, believing that it will bring an eternity of nothingness. Mark, through tears, tells her that death instead brings a joyful afterlife, introducing the concept of a Heaven to her, and she dies happy.
Mark soon receives worldwide attention for his supposed new information about death. After encouragement from Anna, he tells the world, through "ten rules" (mirroring the Ten Commandments), that he talks to a "Man In The Sky" (God) who controls everything and promises great rewards in the good place after you die, as long as you do no more than three "bad things" (Sin). Some time later Anna and Mark are together in a park and Anna asks him, if they marry, would his now being rich and famous make their children more physically attractive. Mark wants to lie but does not because of his love for Anna, and says no.
Meanwhile, Mark's enemy Brad Kessler (Rob Lowe) pursues Anna romantically, motivated by Mark's success. Though Brad's selfish, cruel manner makes Anna uncomfortable, she continues dating him and they become engaged. Before the wedding Greg appears and convinces Mark that he has not missed his chance with Anna. Mark reluctantly attends Anna and Brad's wedding, where he objects to the marriage, but the officiant informs him that only the Man in the Sky can stop the wedding. Brad and Anna both ask Mark to ask the Man in the Sky what Anna should do but Mark refuses to say anything and leaves, wanting Anna to choose for herself. Anna walks out and Mark confesses his ability to lie. Anna struggles to understand the concept and asks why he did not lie to convince her to marry him; Mark states that it "wouldn't count". Anna confesses that she loves him.
Some time later, Anna and Mark are shown happily married with a son, who appears by his actions to have inherited his father's ability to lie.
The soundtrack includes Elvis Costello's otherwise-unreleased rendition of the Cat Stevens song Sitting.
Songs also include: Eddie and the Hotrods' "Do anything you wanna do", Donovan's "Catch the Wind", Supertramp's "Give a little bit" and ELO's "Mr Blue Sky".
Production of the film originally used the title This Side of the Truth.
Media Rights Capital and Radar Pictures financed the film. Shooting took place primarily in Lowell, Massachusetts; location shoots also took place in Quincy, Andover, North Andover, Sudbury, Tewksbury, Boston, Massachusetts and Haverhill, Massachusetts. Principal photography was completed in June 2008.
Warner Bros. owns the rights for the film's North American distribution, while Universal Pictures owns the rights to release the film outside of North America. The film was released in North America on October 2, 2009. Its world premiere occurred two weeks earlier at the 2009 Toronto International Film Festival on September 14, 2009.
The DVD and Blu-ray were released on January 19, 2010. Gervais briefly promoted the DVD during his hosting duty at the 67th Golden Globe Awards in a joking manner, referring to its modest box office results.
Review aggregator Rotten Tomatoes reports that 58% of 182 critics have given the film a positive review, with a rating average of 5.9 out of 10. On Metacritic, which assigns a normalised rating out of 100 to reviews from film critics, the film has a rating score of 58 based on 31 reviews, suggesting "mixed or average reviews".
Roger Ebert of the Chicago Sun-Times awarded the film three and a half stars out of four saying "in its amiable, quiet, PG-13 way, [it] is a remarkably radical comedy". Xan Brooks of The Guardian was also favourable, giving the film four out of five stars, although he was critical of some aspects: "It is slick and it is funny. But it is also too obviously schematic, while that romantic subplot can feel awfully synthetic at times." Manohla Dargis of The New York Times called it a "mostly funny if melancholic defense of deceit" that "looks so shoddy that you yearn for the camerawork, lighting and polish of his shows, like the original The Office, because, really, these days TV rarely looks this bad." In some scenes, Dargis says "lying becomes a means to transcendence, an escape from the quotidian, from our oppressive literal-mindedness, from our brute selves. For the most part, though, Mr. Gervais prefers to shock us with our own brutality...[with] unvarnished truths [that] begin to feel heavy, cruel."
The film opened at #5 with $7,027,472 behind Zombieland, Cloudy with a Chance of Meatballs in its third weekend, the Toy Story/Toy Story 2 3-D double feature, and Surrogates in its second weekend. The film has grossed $18,451,251 in the United States, and $13,955,256 internationally, with a worldwide gross of $32,406,507.