Shawn Spencer is a 30-something screw-up, and the son of respected Santa Barbara Police Detective Henry Spencer. Shawn has always had extremely well-honed observational skills as well as a photographic memory, but the constant pushing from his dad to one day be a police officer like him drove Shawn to become a rebel and a slacker.

One day,, after calling in tips on dozens of crimes covered on the news which help the police to close the case, the police become suspicious of his knowledge. The police theorize that such knowledge could only come from the "inside" and they decide to arrest him as a suspect. To avoid being sent to jail, Shawn uses his observational skills to convince the police that he is psychic. The interim police chief warns Shawn that if his "powers" are fake, he will be prosecuted.

With no choice but to keep up the act, and having proven himself an effective aid to the police in solving crimes, he establishes a psychic detective agency, Psych, and becomes an outside consultant to the police. Pretending to have psychic powers allows him to engage in strange and comic behavior as he turns real clues into hunches and otherworldly visitations. He enjoys teasing lifelong friend Burton Guster (Gus), a pharmaceutical sales representative, about Gus's eclectic interests as they drive around in a blue Toyota Echo nicknamed "The Blueberry" solving crimes.