It is also known by the subtitle Once Upon a Time There Was a Country (Serbian: Била једном једна земља, Bila jednom jedna zemlja), which was the title of the 5-hour mini-series shown on Serbian RTS television.
The film uses the epic story of two friends to symbolically depict and satirise the history of Yugoslavia since the Second World War. The film was an international co-production between companies from FR Yugoslavia, France, Germany and Hungary.
The theatrical version is 163 minutes long. In interviews, Kusturica stated that his original version ran for over 320 minutes, and that he was forced to cut it by co-producers.
The film opens in Belgrade in the early morning hours of Sunday, April 6, 1941 as two roguish bon vivants Petar Popara nicknamed Crni (Blacky) and Marko Dren are heading home following a night of hard drinking and partying out on the town. Riding atop a horse carriage while tailed and serenaded by a brass orchestra, they're drunkenly singing and shooting their way through the city's downtown. They pass through Kalemegdan and shout salutes to Marko's brother Ivan who's an animal keeper in the city's zoo. A stutterer with a lame leg, Ivan is already up to feed the animals and waves to them warmly as he records food portion amounts while listening to early morning radio bulletins.
As the drunk duo pulls up in front of Blacky's home, his pregnant wife Vera comes out to angrily usher her husband into the house while naggingly threatening to leave him "just like Marko's wife left Marko". Intoxicated Marko pulls Vera aside and lets her know that they enrolled Blacky in the Communist Party, but she's way too angry about Blacky's irresponsible behaviour as a husband to even properly process that piece of information.
After saying their drunken goodbyes for the night, Blacky goes into the house while Marko proceeds on and picks up a street prostitute before disappearing into his house with her.
After the air raid is over, Blacky goes out against the wishes of his wife and inspects the devastated city. Encountering building ruins and escaped wild animals from the zoo along the way, he also runs into disconsolate Ivan carrying a baby chimp named Soni. Blacky's parting piece of advice to his best friend's brother is a stern: "Stop crying! You want the Germans to see you like that and laugh at you?" before giving him some money to buy milk for the monkey.
Royal Yugoslav Army's resistance is quickly broken, and Nazis soon occupy and dismember the entire Kingdom of Yugoslavia. Blacky starts operating clandestinely as a communist activist along with Marko and others. Their activism mostly consists of stealing German weapons shipments as well as jewellery and other valuables from the city's elite. In theory, the idea is to send all the weapons and money made from the stolen goods to Partisan guerrillas fighting in the woods, however, much to Blacky's dissatisfaction, many of the 'activists' are using the rackets for personal gain.
Blacky occasionally visits his mistress Natalija Zovkov who's been assigned to a special actors' work brigade that's helping out with the city's rebuilding effort under German occupational control. An acclaimed, pampered, and celebrated actress in the National Theatre, Natalija is finding it hard to adapt to manual labour, especially in the light that she also has a sick, wheelchair-bound brother Bata to take care of. On one of his visits to the site where she's cleaning bricks with her brother and other actors, Blacky brings her a stolen necklace, which cheers her up momentarily, but she now generally sees their relationship as a liability fearing that it could only bring her trouble like being sent away to the prison camp, especially after she heard about the bounty prize Germans have set for his capture. However, she's not without options as she's caught the eye of a high-ranking German officer named Franz who is more than willing to indulge her and pay for Bata's medicine, meaning that her manual labour days are over. Naturally, Blacky is furious over her relationship with Franz and watches in disgust as two of them drive off together.
Meanwhile, Marko has set up weapons storage and hideaway spot in the cellar of his grandfather's house. Following their interception of a large trainload of weapons, Marko and Blacky are mentioned by name and identified as dangerous bandits in Nazi radio bulletins. While Blacky is off hiding in the woods as Germans are intensifying door-to-door raids in the city, Marko takes Vera, Ivan and many others into the cellar to hide.
Vera is due any minute and gets contractions immediately upon entering the cellar. She's not feeling well physically and emotionally, and is especially mad about Blacky not being there for her. After giving birth to a baby boy, she instructs Ivan to name the baby Jovan before passing away on the cellar stairs as Ivan weeps inconsolably.
The two best friends then head for the theater in jovial mood while blurting out random lines from a Mayakovsky poem. The bravado and jocular tone are only briefly interrupted when Blacky states his disgust about many activists within the organization using the situation for personal profit, urging Marko to do something about it "as a party secretary".
Once in the theater, they see Natalija performing on stage in front of beaming Franz and other German officers. Overcome by intense feelings of love and jealousy, Blacky forces his way backstage and enters the scene pretending to be part of the production. Speaking in broken German he requests the other actor to tie him and Natalija together back-to-back with a rope. With Natalija fastened to his back, Blacky walks up to the edge of the stage and shoots Franz twice in the chest before running away as chaos ensues inside the theater.
With Natalija still strapped to his back, Blacky manages to reach the river boat anchored just outside of Belgrade. Naturally, Marko is along as well, in addition to a brass band, and all are getting ready for a forced wedding despite Natalija's protestations. As they eat and drink, waiting for the priest to show up, live band is playing loudly and exuberantly. Blacky criticizes his tied up bride-to-be for performing for Germans, lecturing her that other women like her take care of the wounded in the woods. However, he can't bear to admonish her for long as his infatuation runs deep, but he's not nearly as forgiving when it comes to other artists who similarly performed for Germans as he vows to personally strangle National Theater director Jovan Popović. As Blacky goes off into the bushes to relieve himself, taking the brass orchestra along, he leaves Natalija tied in ropes and instructs Marko to "take care of my bride". In the bushes, Blacky is approached by Partisan messenger who just arrived from the high command informing him that comrade Leka will take disciplinary action against him if the weapons don't arrive soon. Blacky's not worried and brings the messenger into the boat to show him it's full of weapons and assure him he'll transport them as soon he's married.
While this is going on, Marko starts to put the moves on Natalija through belittling his best friend by pointing out class disparity between her "our greatest actress" and thuggish Blacky. To that end he tells her that Blacky had been falsely presenting himself as an electrical engineer, when in fact he's "a mere electrician - a pole climber" by which she seems disgusted. Marko even brings Blacky's morals and communist resolve into question by telling her he has completely changed since he came into the money. Marko further sweetens his case by telling her she needs a rational intellectual like himself by her side to which she seems receptive. Suddenly, Blacky bursts in and roughs up both Marko and Natalija. Faced with Blacky's fury, she quickly changes her tune and now assures him that she wants to marry him as Marko also pleads his case and denies any wrongdoing. Blacky is somewhat pacified, but still decides to humiliate Marko by riding him like a horse around the boat deck while the band is playing.
A couple of hours later there's still no sign of the priest, but the wild night of drinking and dancing continues regardless as Blacky, Marko, and Natalija seem to have abruptly cleared up their misunderstandings. As the dawn appears, the party is interrupted by German soldiers surrounding the anchored boat. Suddenly, Franz is seen yelling from the distance behind his soldiers, demanding Blacky and Marko release Natalija. Blacky is shocked at the fact Franz is not dead, at which time Natalija unctuously points out that he always wears a bulletproof vest, before running off from the boat into Franz's waiting arms. Confused and angry, Blacky irrationally chases after her, but gets only as far as the boat ramp before Germans stop him with guns drawn. He yells back at Marko to open fire, but instead of heeding his request, Marko starts the boat up and sails off, leaving his friend in a lurch. Blacky is captured by Germans and taken into custody.
The very next day Blacky is being tortured in the city hospital by electroshocks while Franz and Natalija visit her brother Bata at the same hospital and discuss moving him to a sanatorium in Austria. Meanwhile, Marko has found a way to enter the building through an underground sewer passage and posing as a doctor manages to enter the hospital room where Franz, Natalija and Bata are talking. Sneaking up on Franz, Marko strangles him to death with a cord in front of Natalija who switches sides once again. Marko then proceeds to a room where Blacky is being tortured and manages to free him. The plan is to leave with fatigued Blacky hidden in a suitcase, but Blacky requests a bomb to commit suicide in case he's captured again. As they're all heading back through the sewer, Blacky drops the activated bomb by mistake and gets blown to bits inside the suitcase.
He manages to survive the explosion though, but requires an extended recovery period in the cellar.
A few days later on Easter 1944, Marko and Natalija, now an official item, are watching comatose Blacky from their living room as he recovers in the cellar below. They proceed to dance and exchange exaggerated tenderness as the allied bombs start to fall on Belgrade. Natalija's response to most of Marko's fawning love declarations is: "Marko, you lie so beautifully".
Soon, the Red Army accompanied by Yugoslav Partisans enters Belgrade thus liberating the city from the Nazis for good. Marko, an important cog in the revolutionary machine is seen proudly waving the communist Yugoslav flag and victoriously exclaiming: "Freedom".
Over the coming years he's advancing up the party and state ladder: he holds fiery speeches from the National Theater balcony during the Trieste crisis, he socializes with Tito, Ranković and Kardelj - attending lavish parties and going on foreign state visits with them, and he stands right next to Tito during military parades through downtown Belgrade. Throughout it all, Natalija is right by Marko's side.
Marko and Natalija attend a ceremony to open a cultural center and also to unveil a statue of Petar Popara Blacky whom everyone thinks died fighting the Nazis and is thus awarded the status of a National Hero. Before delivering a keynote speech, Marko is approached by a film director who inquires whether he'd allow Natalija to play a role in the film based on his own memoirs. Marko's answer is a vehement no, but he does agree to visit the set.
Below ground, the full extent of Marko's meticulous deception is revealed. It goes to astonishing details: from time to time he stumbles down into the cellar looking haggard and beaten, pretending that Gestapo roughed him up so that the people below still think German door-to-door raids are on-going. He also regularly plays air-raid sirens as well as various newsreels that show Nazis holding strong on Eastern Front, while urging restless Blacky to stay below and save his energy for the final battle. As a special incentive, Marko even brings his best friend an engraved watch as a personal gift from Tito himself.
With the help of his grandfather who is in on the devious con, Marko oversees the weapons manufacturing and even controls time by adding hours to a day so the people in the cellar think that only 15 years passed since the beginning of World War II instead of 20. They're continuously making weapons, and Marko profits from it enormously.
The filming of an epic state-sponsored motion picture based on Marko's memoirs titled Proleće stiže na belom konju (Spring Comes On A White Horse) begins above ground. Receiving a hero's welcome by the film's cast and crew, Marko and Natalija visit the set during shooting of the scene that erroneously depicts events on the anchored river boat on that fateful night in 1944.
Back home, in order to keep the lie going, Marko has prepared a text for Natalija to deliver in front of Blacky down below. The premise is that she's been raped and beaten by Germans, and left for dead. After some initial resistance, Natalija agrees to go along with it and in make-up that's making her look savagely beaten even delivers a scripted "I love you" to Blacky who seems energized by her declaration.
Soon, Blacky's 20-year-old son Jovan is getting married to Jelena, a girl he grew up with in the cellar. Marko and Natalija are naturally invited for a celebration. Blacky pulls his son aside and tells him he can't wait any longer and that he'll go above to fight as soon as everyone gotten drunk. He also relays his frustration about being told to wait for Tito, the party or the Russians and has decided to take matters into his own hands.
On the other table, all is not well with Natalija and Marko as she, influenced by alcohol, starts making a scene accusing Marko of stealing her youth and bemoaning her bad luck to have ever come across him. She soon begins admonishing him for the crime he got himself involved in, but he soon pacifies her at which point she repeats her statement "You lie so beautifully".
However, Blacky has heard their conversation and instead of personally killing Marko he hands him a gun and tells him to finish it himself. Blacky proceeds to tie Natalija to his back while Marko instead of committing suicide, blows out his own kneecaps with a gun. As he's doing that, Ivan's monkey Soni has wandered into a tank and fires a round blowing a hole in the wall.
Blacky with Natalija tied to him goes out and calls his son Jovan along. Blacky, with his son Jovan, emerge from underground; believing WWII is still on, they kill the lead 'Nazi' on the set of the film dramatising Blacky's own exploits twenty years earlier. In the manhunt Jovan drowns but Blacky escapes.