The film shows one week, beginning with Monday, in the life of Paterson, a bus driver from the city of Paterson, New Jersey. Every day follows much the same pattern: Paterson gets up early and goes to drive his bus, where he listens to the passengers talking and, during pauses, writes poetry in a notebook he is carrying with him. When he comes home after work he takes Marvin, his wife’s dog, out for a walk and makes a stop at his bar for a beer, where he observes the other patrons and the owner, Doc (Barry Shabaka Henley), interacting.
His wife Laura loves his poems and has urged him for a long time to publish them or at least make copies. He finally gives in and promises to go to the copy shop on the weekend. But when the weekend arrives and Paterson and Laura come home from an evening out, they find that Marvin has shredded his notebook, destroying all of his poetry.
The next day, a dejected Paterson goes out for a walk and sits down at his favorite site, the Great Falls of the Passaic River. There, a mysterious Japanese man (Masatoshi Nagase) takes a seat beside him and begins a conversation about poetry after Paterson notices that the man is reading a book by his favorite poet, William Carlos Williams, who himself wrote a book-length poem entitled “Paterson”. The man seems to know that Paterson himself is a poet even though he denies it and hands him a gift before leaving, an empty notebook.
The film ends with Paterson writing a new poem in his new notebook.