Part 1

Long missing and believed dead, Lemuel Gulliver is found in the stables of his own home one morning by his wife Mary and son Tom. He narrates what is received as a tall tale that begins with being shipwrecked on an island of tiny people called Lilliput, shown as flashbacks, while Gulliver also hallucinates some of the persons and events he witnessed.

Gulliver explains the strange customs of Lilliput, such as selecting government officials by jumping over and going under a stick held by the Emperor of Lilliput. Gulliver is presented to the Empress of Lilliput and is asked to fight a war against the enemy country of Blefuscu. To show his gratitude, Gulliver accepts and wins the war by disabling the Belfuscu Navy. During celebrations, a fire begins at the palace in the Empress's chambers; Gulliver puts out the fire with his own urine, leaving the Empress humiliated and demanding his execution. The country's leading generals also want him killed, for refusing to further decimate Blefuscu. Fleeing from the Emperor's army, Gulliver's Lilliputian friends hide him and help build a raft to escape on.

Meanwhile, Gulliver's wife Mary asks for the help of Dr. Bates, who had taken over both Gulliver's position and house, allowing Mary and Tom to live there. Bates, who wishes to wed Mary, conspires to have Gulliver detained at a mental institution, suggesting Gulliver has dementia. Mary goes to visit Gulliver there; on one of these visits Tom enters Bates' home office and finds Gulliver's travel satchel, containing his journal and a Lilliputian sheep, corroborating his story. Bates attempts to burn the journal. Over time Bates exerts enough influence over Mary to stop her hospital visits; Tom, on the other hand, recovers the damaged journal and hides it in his room.

At the mental institution, Gulliver continues to spin his tale. His Lilliputian raft crashes in Brobdingnag, a land populated by Giants. He is found by Farmer Grultrud, who exhibits him as a crop guardian. Gulliver is later sold to a lady of the royal court, along with the farmer's daughter Glumdalclitch as his caretaker, and presented to the Queen of Brobdingnag. For being the smallest creature, Gulliver displaces court dwarf Grildrig, who comes to despise him and later attempts to kill him. Gulliver is examined by doctors who ridicule him for his size. To ingratiate himself, Gulliver discusses many aspects of English culture and politics with the Queen, which she ultimately finds repugnant in comparison to the fair-sharing system of Brobdingnag.

While awaiting a feast, Grildrig sends some giant wasps to kill Gulliver, but Gulliver is swift enough to kill them. He then extracts a wasp's sting and makes a dagger from it. To restore his standing with the queen, Gulliver has arranged for a gunpowder demonstration, which the scientists increase tenfold without his knowledge; the resulting explosion puts him more out of favor. Meanwhile, Glumdalclitch has fallen in love with Gulliver and wishes to marry him. Gulliver softly rejects her advances and asks her to free him. Glum takes Gulliver to the beach to search for ships that might take him home, but are unsuccessful. An eagle makes off with Gulliver's travel box, dropping it at sea. With no supplies, Gulliver believes his life at an end when he sees a gigantic floating rock in the sky.

Part 2

Continuing his tale, Gulliver is rescued by the people of the flying land of Laputa. He befriends the Rajah and his "idiot" son Prince Munodi. The prince shows Gulliver how the island is controlled, by a massive lodestone repelling them from the planet. Laputa is supplied by taking tribute from the lands they pass over; one of these lands is ruled by the prince's mother Empress Munodi, who refuses to give tribute. The Rajah demands a bombing attack, to which the Empress responds with a giant lodestone of her own, causing Laputa great turbulence. The prince suggests reversing the lodestone to stop the interference. Gulliver makes this happen, but falls off the island into the Empress' palace for his troubles.

Empress Munodi directs Gulliver to The Academy, a place suggested by the Rajah where he may find a path back to England, where he encounters many scientists lacking in common sense. Leaving that place, Gulliver encounters a magician in Glubbdubdrib. He stays at the magician's palace with the promise of being taken to a port to go to England, but each day the magician puts him off, saying "tomorrow." Gulliver later discovers the magician is drugging him and using his blood to summon the ghosts of great figures such as Alexander the Great and Julius Caesar. Gulliver later summons more spirits by his own will, and uses this power to overwhelm the palace and gain freedom.

Meanwhile, as Bates will not allow Mary to see Gulliver, telling both that the other refuses to see them, she writes letters to her husband, which Bates intercepts and stashes on his office bookshelves. Some time later, Tom reveals to Mary that Bates has been hiding the letters. She confronts Bates, intending to take her husband home.

Gulliver tells his fellow inmates about meeting the immortal Struldbrugs, who imprison him for trespassing. He gives his wasp-sting dagger to the Gatekeeper to enter, but rejects their offer to gain immortality by drinking their water – the price being continuing to age on the inside, suffering ailments like blindness. Gulliver makes it to a port and joins a ship, but a mutiny en route leads to him swimming to another strange land.

Gulliver encounters the mud-covered, savage Yahoos and the intelligent, graceful Houyhnhnm horses. He talks to the Houyhnhnm Mistress and explains his costumes and lifestyle, and begins to admire more their culture. He studies the customs of Yahoos and Houyhnhnms and decides to prove to the Houyhnhnms that he's more like them. He even rejects the diamonds he finds in a quarry. After a savage encounter with a female Yahoo, the Houyhnhnms, even though they recognize his virtues, form a council and decide that Gulliver must leave. With sadness, Gulliver departs the island and is rescued by a Portuguese ship, against his will.

Gulliver is subjected to a medical evaluation while he relates his Houyhnhnm experience. Mary, having witnessed the hearing, supports her husband against Bates' accusations and questions his motives for keeping Gulliver in the hospital.

Gulliver's son enters the court room showing the small Lilliputian sheep Gulliver took care of. With this proof of his story, Gulliver is released. Bates goes abroad soon after and is not heard from again. Gulliver struggles against re-becoming like a Yahoo, and shares what he is now as a person.

Main

• Ted Danson as Lemuel Gulliver
• Mary Steenburgen as Mary Gulliver
• Tom Sturridge as Tom Gulliver
• James Fox as Dr. Bates
• Peter O'Toole as Emperor of Lilliput
• Omar Sharif as Sorcerer
• Alfre Woodard as Queen of Brobdingnag
• John Gielgud as Professor of Sunlight

Guest