Ozaki, a mentally unstable yakuza, kills a chihuahua outside a restaurant after becoming convinced that it is actually an attack dog trained to kill gangsters. Seeing Ozaki as a security risk, the head of the Azamawari yakuza clan orders Ozaki's brother, Minami, to kill him and dispose of his body in a company depot. Minami, reluctant to murder Ozaki, unwittingly kills him when he pushes him to the ground in an attempt to stop him from killing an innocent woman who he mistook for an assassin. After finding the road he was driving along mysteriously replaced with a large lake, he enters a coffee shop to find a phone. Minami is given a complimentary meal that makes him violently throw up in the bathroom and returns to discover that Ozaki's body is missing. When he asks the people in the town, he finds most of them apprehensive and uncooperative. He then sets out to explore the nearly-deserted, run-down suburb of Nagoya in a desperate attempt to recover the body, only to find himself caught in a series of increasingly surreal situations. He meets several strange characters including an elderly innkeeper obsessed with her breast milk, her strange brother who can supposedly channel spirits, a waiter who died three years ago in a car accident and gozu or a man with a cow's head, who appears to him in a dream. Minami tracks Ozaki to a junk yard, where he is told that he was murdered and turned into a skin suit. He returns to his car to find a girl who claims to be Ozaki. After sharing intimate details of their life, as well as one of his dreams, he believes her. After attempting to convince the head of the Azamawari clan that the woman is his brother, he is berated and dismissed. The elderly head of the clan invites the woman home and tries to have sex with her, but Minami arrives and kills him. After the woman repeatedly tries to convince Minami to have sex with her, he agrees, only for his penis to become stuck inside of her. After freeing himself, he finds a hand sticking out of her, and she gives birth to a shocked, fully-grown Ozaki, becoming withered and old in the process. The two give her a bath and she returns to normal. The three of them happily walk down the street as one of the residents of Nagoya is seen laughing.
On the review aggregator website Rotten Tomatoes, the film has an approval rating of 72%, based on 57 reviews. Metacritic, which uses a weighted average, assigned the film has a score of 58 out of 100 based on 19 critics, indicating "Mixed or average reviews". In a review for The Washington Post, Michael O'Sullivan wrote that "Gozu makes little sense on paper. As a film, however, it somehow feels richly, hilariously real, even – at its most bizarre – familiar." Ty Burr of The Boston Globe called it "creatively unhinged" and referred to it as "not your average midnight movie but something more hermetic." Jay Boyar of the Orlando Sentinel also reviewed the film positively, writing that "there is something compelling about the way this film sneakily taps into our collective psychosexual fantasies." A. O. Scott of The New York Times wrote that "For Mr. Miike's fans, it will be an indispensable compendium of outtakes and sketches. For others, it will be a mystifying and provocative introduction to his unnerving, wanton and prodigious imagination." Stephen Hunter of The Washington Post wrote that the film "is not in line with best work". G. Allen Johnson of SFGate wrote that the film "is for Miike freaks only. Everyone else: Stay far, far away." Jeff Shannon of The Seattle Times called the film "an undisciplined mess", writing that it "trades Lynch's nightmare logic for exasperating incoherence".
