When beautiful young Grace arrives in the isolated township of Dogville, the small community agrees to hide her from a gang of ruthless gangsters, and, in return, Grace agrees to do odd jobs for the townspeople.

In 1933, after leaving Dogville, Grace Margaret Mulligan sees a slave being punished at a cotton farm called Manderlay. Officially, slavery is illegal and Grace stands up against the farmers. She stays with some gangsters in Manderlay and tries to influence the situation. But when harvest time comes, Grace sees the social and economic reality of Manderlay.