The film takes place in 19th-century Russia in a small provincial town where corrupt officials rule the roost and which the auditor decides to visit.
One day, the town's mayor, Skvoznik-Dmukhanovsky, gathers local officials to announce that a government inspector is on his way, having received a tip from an old friend.
In reality, this "inspector" is a low-level civil servant from St. Petersburg named Khlestakov, who is only passing through and is stranded after losing all his money gambling.
Drunk on the power he accidentally wields, Khlestakov spins elaborate lies, claiming not only to be a high-ranking inspector but also a close friend of Pushkin and nearly a field marshal.
Embracing his role, Khlestakov borrows over 1,000 rubles from the officials under the pretense of a "loan" and begins flirting with both the mayor's wife and daughter.