Life is Beautiful opens on a note of hilarity as the protagonist, Guido, and his best friend, Ferruccio, rocket down a country slope, the brakes on their rickety old car having given way. They pass through a parade, and the audience is immediately aware of where we are: the bystanders, believing Guido to be a Fascist leader, all raise their arms in the "Heil Hitler" sign. While Ferruccio attempts to fix the car, Guido happens upon a little farm, where the woman who is to become the love of his life literally falls from the sky into his arms. "Good morning, princess!" he cries, grinning widely.
Guido and Ferruccio find lodgings with Guido's uncle, Eliseo, who recently has come under attack by Fascists. Eliseo also helps Guido to get a job as a waiter in a fancy hotel. Guido visits a moneylender in an effort to secure a loan to open up a bookshop, and he soon realizes that the disagreeable man, Amico, who refuses his loan is also the betrothed of the woman who fell into his arms, Dora. The following series of events demonstrates what a truly extraordinary character Guido is: he is uniquely capable of manipulating his surroundings so that events that are "coincidences" take on the aura of genuine magic. It is this ability that ultimately sways Dora: on one rainy night, Guido virtually steals her away from the insipid Amico and takes her on a journey through her imagination to a place where pillows can be used as skirts, the Virgin Mary throws keys from the heavens, and red carpets unroll through darkened piazzas.
At Dora's engagement party to Amico, she decides once and for all to run away with the mysterious man who keeps appearing out of nowhere. Guido rides Uncle Eliseo's horse (which has been painted green and graffitied with the words "Jewish horse") into the ballroom and spirits her away to the home where they are to leave for several joyful years. They have a son, Giosue, who has his father's enthusiasm for life and his mother's tendency to hiccup.
A far darker event occurs: Guido begins to be harrassed by the Fascists. Soon he, Eliseo, and Giosue are taken away on a train to a concentration camp. Dora, refusing to be left behind, insists that she be allowed to go to the camp as well.
At the camp, Guido decides that he will create an elaborate ruse to protect his son from the horror of their situation. He tells Giosue that his own father took him on a "trip" just like this one when he was a boy, and that if he stays silent, does not cry or ask for his mother, and obeys all the rules, he will win points. After he wins 1,000 points, he will get first prize: a real tank. Giosue, excited at the idea, approaches the camp as a game rather than what it truly is: a prison.
The three adults go in very different directions once at the camp. Eliseo, since he is an old man, is taken to the showers. Dora goes to the women's camp, where she hears stories about the children being slaughtered and fears for the safety of her husband and son. Guido and Giosue go to the barracks, where Guido continues to imbue the darkness of the camp with an air of levity and joy. He even commandeers the loudspeaker so that he and Giosue can cry out to Dora that they miss her and love her.
Guido's hope for escape arrives when he is asked to be a waiter at an event where Doctor Lessing, an old friend of his from the restaurant back home, now a doctor in the Nazi army, will be dining. Doctor Lessing, however, ignores the gravity of Guido's situation; it seems that he only wanted Guido to wait tables at the party because he needed help solving a riddle. Desolate, Guido takes Giosue back to the barracks, but not before stopping to play the Offenbach opera that he and Dora once attended over the loudspeaker in an effort to lift his wife's spirits.
Soon the war is over, and the camp is thrown into a state of confusion and panic. All of the prisoners are being loaded onto trucks that are returning empty. Desperate to warn Dora, Guido tells Giosue to hide in a cabinet until everyone has gone, dons women's clothing, and sneaks over to the women's camp. He is discovered, but as he is marched off to his death, he manages to give his son one last moment of joy: as he walks by the cabinet where Giosue is hiding, he throws his son a wink and does a funny little walk--playing the game to the bitter end.
When morning arrives Giosue, seeing that everyone has gone, tentatively crawls out of the cabinet. He looks around in confusion and then hears a rumbling in the distance. His eyes light up: a real tank is rounding the corner! He has won! An American soldier pulls him up into the tank, and they ride out of the camp. As they pass the crowds of escaped prisoners, Giosue recognizes his mother and runs to her. She wraps him in a tight embrace. "We won!" he cries out. "Yes, we won," Dora says.
The next day, Guido is preparing to wait tables. He sees German children playing hide-and-seek outside. He sneaks back to the barracks and brings Giosue to see that there are other children having fun. When the mistress of the children spots Guido and Giosue, Guido tells Giosue to go with her but never to speak, so as not to give away the fact that he is not German. At dinner that night, Guido waits tables while Giosue eats with the German children, obediently not saying a word. When food is set down before him, however, he accidentally says, "Thank you" in Italian, catching the attention of the other (German) waiter. When the waiter brings over the headmistress to inspect the situation, they find Guido teaching all the children to say "Thank you" in Italian. Guido is chided for speaking to the children, but Giosue is saved from discovery.
Later, Doctor Lessing says he has something important to talk to Guido about. He pulls Guido into a corner away from the crowd. Rather than helping Guido devise a plan for escape, however, Doctor Lessing recites a riddle that has been vexing him, expressing his hope that Guido will be able to help him solve it. Guido fixes Doctor Lessing with a strange, sad look and leaves the dinner looking downtrodden-even, perhaps, completely hopeless for the first time in the film. Within moments, though, he is back to his old form, finding a recording of the opera that he and Dora saw together in Italy and playing it out the window so that it can be heard by the entire camp. Dora hears the melody and walks to her window, practically in a trance. As Guido walks Giosue home, he takes the wrong way in the fog and is horrified to find a huge pile of bodies.
Guido and Giosue are woken up by a commotion outside. Guido goes to the window and asks Bartolomeo what is happening, and Bartolomeo says that the war is over and that they are "getting rid of everything." The trucks have been leaving full of people and coming back empty. Guido, thinking of Dora, asks, "What about the women?" Guido takes Giosue and manages to escape the barracks in the commotion. He tells Giosue to hide, explaining that he will gain enough points to win the competition if he is not found. He tells Giosue not to come out until no one else is around. Guido wraps a rag around his head and covers himself in a blanket so that he looks like a woman. He sneaks over to the women's barracks to warn Dora not to get on the trucks, but before he can find Dora, he is spotted. He runs but is caught and marched away by a man carrying a machine gun. Guided by the soldier, he passes by Giosue's hiding place. He turns his head to give his son a wink. Guido and the soldier turn the corner, and machine gun fire is heard. The guard walks back out-without Guido.
The next day, the last of the guards are leaving. After they abandon the camp, hundreds of surviving prisoners shuffle into view. Once everyone has left, Giosue comes out of his hiding place and walks around the empty camp. He hears a rumbling sound that grows louder and louder-and suddenly a tank turns the corner, headed towards him. "It's true!" yells Giosue, joy breaking across his face. An American soldier opens the hatch and asks Giosue to get in the tank. Giosue rides out of the camp in the tank. As the soldiers pass a line of refugees from the camp, Giosue recognizes his mother and cries out, "Mommy!" The tank stops, and Giosue runs to Dora. He tells her that they got 1,000 points and won the competition. She responds, "Yes, we won."
The doctor's relationship to Guido brings up the theme of silence again. Though Doctor Lessing is friends with Guido, he does nothing to help him, and until Guido breaks the silence, the doctor simply treats him like any other prisoner. Lessing is not outraged at the treatment of his friend, and he does nothing to stop it. Earlier in the film, Guido's Uncle Eliseo asserted that sometimes silence is the best weapon. Now, it has become clear that silence far more often permits great evils to take place.
The juxtaposition of Guido's made-up world of fun and games with the death and misery of the camp is almost ridiculous. Earlier in the film, when Guido said, "What's the worst they can do? Paint me yellow and write on me, 'Jewish waiter?'" the audience's awareness that the Fascists would do far worse imbued the scene with a terrible poignancy. Now, in the camp, Guido's machinations have a similar effect. The evils that the Fascists perpetrate are thrown into sharp relief, and the horrors that they are willing to inflict on their fellow man are so terrible as to be almost comical. Guido makes keys fall from the sky and believes in the Schopenhauer Method, but when his son suggests that the Fascists are making buttons and soap out of Jews, he laughs at the ridiculousness of the idea. The truth about what Fascists do is more outlandish than any scheme Guido has attempted.
When Guido and Doctor Lessing rendezvous in a corner during the dinner party, Guido expects his old friend to acknowledge the gravity of his situation and help him find a way to escape from the camp. But Lessing instead asks him to help solve a riddle. Doctor Lessing was Guido's last hope of getting out of the camp alive (although it turns out that some of the prisoners do emerge alive), and the fact that the doctor is blind to Guido's reality (and humanity) is crushing to Guido. To the doctor, Guido is little more than an encyclopedia. This scene is one of the saddest and most poignant in the film: Guido is looking at the doctor, clearly hoping for a solution to his life-and-death situation, and Doctor Lessing is instead making animal noises and pleading with Guido, "Help me ... I can't even sleep." The total absence of guilt or a sense of responsibility condemns Guido to almost certain death, but the doctor does not realize this, being wholly obsessed with a trivial riddle. The incongruity of Guido's dire situation and the doctor's priorities is shocking, revealing the degree to which the doctor is also out of touch with reality. He is either retreating from the traumatic truth of the Fascists' treatment of the Jews, or he simply has a dangerous inability to empathize with others. In either case, his character symbolizes the myriad ways in which individuals contributed to the horrors of the Holocaust: some by directly perpetuating acts of evil, and others by simply standing idly and doing nothing to help.
Throughout Life is Beautiful, Guido has deftly shaped his surroundings to fit his fanciful stories and games. He has an uncanny ability to make pre-existing circumstances fit his stories, almost as if he is creating coincidences instead of happening upon them. When he and Giosue arrive at the concentration camp, however, the viewer anticipates a disappointingly tragic end to the "game." Guido himself almost won. Despite the fact that Guido dies, Giosue and Dora survive, and every piece of the fiction he has created for Giosue falls into place. When the tank drives up, Giosue truly believes that he has won the prize his father promised. Remarkably, Guido's fantasy has become a reality. Since the Fascists exert such powerful control over others, it is practically magical that Guido has almost completely shielded his son from the horrors of the camp and kept him alive despite the mortal dangers that took Guido's life. The tank showing up and completing the "game," however, is indeed a coincidence that Guido could not have planned. This is a bleak reminder that even Guido's prodigious talent cannot fully control such a tragic situation. Though things turned out well for Giosue and Dora, they just as easily could have turned out very badly. The coincidence of the tank, while inspiring, is also a reminder that many others did not have such luck. Even immense energy and willpower are not necessarily sufficient to ensure survival in such a dangerous world.