In the U.S. of the 1940s, racism is rampant. In New York, personnel clerk Lawrence Newman (William H. Macy) finds that with the purchase of a new pair of glasses he is mistaken for a Jew. Suddenly victim to the discrimination that he has turned a blind eye to in the past, he must reclaim a place for himself in the workforce and in his anti-Semitic Brooklyn neighborhood.

He finds a job at a Jewish-owned company and falls for Gertrude (Laura Dern), a Christian woman who is also mistaken for a Jew. They marry and she comes to live with him and his mother in the family home. Things seem to go well for the couple until a trip to the country opens Lawrence's eyes to the fact that he and his new bride are no longer welcome in a country that he once fought to protect.

Gertrude soon realizes that the Union Crusaders, a violent nationalist group with strong anti-Semitic views and numerous members in the neighborhood including Lawrence's next-door neighbor and one-time friend Fred (Meat Loaf Aday), has targeted them and local newsstand owner Mr. Finkelstein (David Paymer) for harassment and intimidation. Fearing for their lives, Gertrude begs Lawrence to either join the Union Crusaders or move them out of the neighborhood. Lawrence, still unwilling to believe that his neighbors could turn on him, insists that they cannot be treated this way because they are not Jewish. After he and Gertrude are attacked in the street and brutalized, Lawrence finally realizes that right or wrong this is the way things are. He must decide whether to give up the home he has worked so hard for or to stand his ground and risk his life against the Union Crusaders.