Peggy (Molly Shannon) has a job as an assistant to Robin (Josh Pais) at a large business. Her co-worker Layla (Regina King) is dating a young man and planning to marry him; all she talks about is relationships that end in romance. The others in the office appreciate the sweets Peggy brings in every morning, but none of them know her very well. She regularly visits her brother Pier (Thomas McCarthy) and his wife Brett (Laura Dern) and their two small children. All they talk about is their kids and the dangers that await them in an insecure world. Peggy feels cut off from their concerns but tries to be nice all the same.

The only one who matters in her life is Pencil, her beloved beagle. He never lets her down or ignores her. In the evening before falling asleep, she pets him and in the morning as she leaves for work, he pouts. His love in unconditional and her world is lit up by his presence. All the light and joy goes out of her life one evening when he goes out and gets into some poison in a neighbor's garage and dies. The neighbor, Al (John C. Reilly), feels sorry for her (and doesn't know about the poison) and takes her out to dinner. She learns that he lost his dog when he was young and is a hunter. That last fact puts a damper on their relationship.

Peggy plunges into a grief which no one can understand except Newt (Peter Sarsgaard) who works at an animal shelter. He knows just what Peggy needs: Valentine, a German Shepherd who has been abused. She takes in this troubled dog, feeling this is the right thing to do. She begins seeing Newt regularly since he volunteers to train Valentine. He also convinces her to become a vegetarian. She goes on the Internet and learns about companies doing animal testing. Her boss is not happy when she gets people in the office to sign a petition against this cruel practice. Her newfound zeal even includes giving contributions to Paradise Farm, a place that rescues all kinds of animals from the slaughterhouse. Babysitting for her brother's kids, she takes them to visit a farm which she calls a heaven on earth run by a woman she considers a saint.

Year of the Dog is one of the best films of the year with its quirky characters and endearing theme of how one shy and unsociable woman finds her passion in animals. Writer and director Mike White has done a remarkable job catching the comedy in Peggy's journey as well as offering one of the few movies ever to deal with the complex issue of how some people have an easier time relating to animals than to other humans. White demonstrated his creative writing skills in the screenplays for Orange Country, School of Rock, and Nacho Libre and this marks his debut as a film director. Molly Shannon carries the drama with her tender and sensitive depiction of a lonely woman who finds a love that will not let her go. There are moments when her choices seem crazy, but most times it is easy to understand her empathy with animals and her need to do all she can to help them.