Larry Appleton has just settled in his new Chicago apartment after leaving home of one of nine kids and took a job at the corner discount store working for his greedy landlord Mr. Twinkacetti until he can eventually become a photo journalist. But one evening, Balki Bartokomous, his distant cousin and a Mediterranean sheep herder from the island of Mypos shows up on his door step looking for a place to stay. So Larry takes him in and tries to get him a job at Twinkacetti's store which may mean risking his own job.
Larry tries to kickstart his career and gets tipped off that Dolly Parton is in town committing adultery. So he decides to follow her until he can get a picture to sell to newspapers. Meanwhile, Balki will do a favor for anyone who will ask for it so Larry teaches him to say ""no"" once in a while but it backfires on him.
Larry takes Balki to a singles bar to meet women and while Balki gets his first date, Larry gets beat up in a parking lot by a boyfriend of a woman he hit on.
Balki wants to get his driver's license but Mr. Twinkacetti doesn't think he can do it. But Larry is so confident that he can, that he bets $50 and offers Balki his car.
Larry takes Balki to the bank to open a bank account but Balki doesn't seem to understand everything about banking when he overspends with his checks and buys Larry new furniture. Meanwhile, Twinkacetti is going to a poker game and his wife, Edwina doesn't like him gambling. So he asks Larry to tell his wife that they were at a basketball game but Larry refuses to.
Larry is miserable on his 24th birthday after he blew a photo opportunity. So Balki tries to throw him a last minute surprise birthday party for him to cheer him up.
Balki invites Gina, a friend from his citizenship class to stay with them. But she happens to be pregnant and goes into labor in the middle of the night.
Larry decides to join a health club after having the hots for a member named Jennifer. But he thinks she's only interested in jocks and pretends to be one. Balki goes with him and picks up a woman right away who happens to be Jennifer's best friend Mary Anne.
Larry's softball team has a chance of winning the championship but the star player was sent to prison. So He promises to let Balki play until a star ringer shows up.
Larry has a date with a beauty queen but after going to the hospital to visit Mr. Twinkacetti (who has broken his leg), he catches a cold and when Balki tries to cure him with a secret Myposian cure, he ends up sleeping for three days.
After Larry saves Balki from getting hit by a taxi, Balki becomes his personal servant which ends up annoying Larry.
Larry and Balki win a trip to Las Vegas. When they get there, Larry plans out what to do for their entire trip to prevent Balki from going to the casinos and becoming a compulsive gambler. Balki eventually talks him into it and after Balki has a string of good luck playing roulette, Larry starts playing and won't stop.
Balki falls in love with a girl at night school and who makes a play for Larry and constantly breaks dates with him. Balki refuses to believe that she is just using him to get good grades.
Balki agrees to take care of Gina's baby while she goes away with her husband. And since Larry knows more about babies, he is obligated to help Balki. Things go fine until they take him to the park and lose him.
Balki takes a job delivering packages for a racketeer named Vince Lucas. After Vince is busted, they are asked to testify in court but Vince threatens to kill them if they do.
Mr. Twinkacetti hasn't been living up to his landlord responsibilities so Larry, Balki, and all the tenants hold a meeting and declare a rent strike. The tenants still won't quit even after Twinkacetti turns off the electricity, water and heat which is too bad for Twinkie who needs money to pay off a gambling debt.
Larry and Balki are snowed in Chicago on Christmas Eve which means they can't go to Madison to see Larry's family. So Larry is miserable until Balki spreads some Christmas cheer his way.
Balki got a dog and wants to keep it even though it is against the lease. So Larry and Balki do their best to hide it from Twinkacetti.
After Mr. Twinkacetti forgot his wedding anniversary (for the 16th time), Edwina kicks him out. Balki invites him to stay for a while but he makes no efforts to reconcile with Edwina. So Larry and Balki try and get them back together.
Larry and Balki invite Jennifer and Mary Anne over for dinner but cannot agree on what to serve which cases a rift between them and eventually a rift between Jennifer and Mary Anne.
Balki hasn't been sleeping due to a nightmare that has been haunting him about him not being able to help out at harvest season back on Mypos.
Larry has been invited to a formal party for a photographer he idolizes but Balki's honest opinions embarrass Larry.
Larry and Balki become 'big brothers' to a troubled teenager who is always stealing. They do fine until Larry accuses him of stealing his bike.
Jennifer and Mary Anne are going skiing and invite Larry and Balki. Larry thinks he can impress Jennifer by being an expert skier without much luck. So he decides to fake an injury to get sympathy from Jennifer.
The quartet are trapped in a cabin buried alive by an avalanche and they try to dig a tunnel to the outside world.
Larry enters a photo contest and has the idea of a perfect picture. But to take it, him and Balki have to go up on a roof and shoot it before a storm comes in.
Larry and Balki quit their jobs after Twinkacetti refuses to give them a raise and get jobs at a burger joint serving to rowdy hockey fans.
When Larry's sister Elaine stops by for a visit, Larry is appalled when she tells him that she's going to New York to become a pianist instead of college.
