House of sand and Fog is the story of two people driven to desperate measures to claim ownership of a house. It is only a small bungalow in Northern California, but to Kathy Nicolo (Jennifer Connelly), it is the last vestige of hope for reclaiming a life that was nearly lost to addiction. When a bureaucratic error forces her eviction, Kathy is left homeless-helpless to stop the house from being sold at auction for a fraction of its worth.

The new owner, Masssoud Amir Behrani (Ben Kingsley), sees the house as the fulfillment of the American Dream he has been pursuing since he fled Iran with his family years earlier. A former Colonel in the Iranian Air Force, Behrani has been reduced to working menial jobs to maintain a pretense of affluence. Now he pours the last of his life savings into the purchase of the house that will, at last, bring back the prosperity of his family once knew.

As Kathy and Behrani's fight for the house escales, Kathy finds an unlikely ally in the officer sent to evict her, Deputy Sherrif Lester Burdon (Ron Eldard), who becomes dangerously devoted to her cause. Caught in the maelstrom are Behrani's wife, Nadi (Shohreh Aghdashloo) and son, Esmail (Jonathan Ahdout).