Taken by surprise, the Oscar-nominated writer is desperate to revive his career. He seeks the advice of a very successful screenwriter buddy, Jack (Bridges), who arranges an introduction to Sarah (Stone), a modern-day muse who can inspire anyone.
Sarah, however, has conditions and unnecessarily lavish needs, such as expensive hotel rooms and gifts from Tiffany & Co. Steven is forced to make good on those conditions, much to the chagrin of his wife Laura (MacDowell).
Steven isn't sure if the muse could be the real thing or just somebody sucking him dry of his money and patience. She takes him to Long Beach, where they encounter writer-director Rob Reiner, someone Sarah clearly knows. Steven gets an idea for a movie set in an aquarium and thinks of Jim Carrey as the lead.
As Sarah's demands increase, Steven's apprehensive wife begins to be won over. Through the muse's encouragement Laura decides to pursue her dream of baking and selling cookies, to much fanfare and success.
To save money, Sarah is invited by the Phillipses to move into their house. Steven, however, is frustrated because Sarah spends more time helping others—notably Hollywood writers and directors like James Cameron and Martin Scorsese, who come to Steven's house to see her. Steven even surrenders his own bedroom to Sarah and sleeps in the guest house.