Dr. Katz was a professional psychotherapist who had famous comedians and actors as patients, usually two per episode. The comedians' therapy sessions generally consisted of them doing their onstage material while Dr. Katz offered insights or simply let them rant. Meanwhile, therapy sessions featuring actors and actresses offered more interpersonal dialogue between Katz and his patient to better suit their predisposition. Dr. Katz is a very laid-back, well-intentioned man who enjoys playing the guitar and spending time at the bar with his friend Stanley and the bartender, Julie.

Interspersed with these scenes were scenes involving Dr. Katz's daily life, which included his aimless, childish 24-year-old son, Ben (Jon Benjamin), his uninterested and unhelpful secretary, Laura (Laura Silverman), and his two friends: Stanley (Will LeBow), and the barmaid, Julie, voiced by one of the show's producers, Julianne Shapiro. In later episodes, Todd (Todd Barry), the video store clerk, became a regular character.

Each show would typically begin with Dr. Katz and Ben at breakfast and initiating a plotline. These plots included events like Ben attempting to become a radio personality, believing he is in possession of ESP, or the moral conundrum he suffers after receiving a chain letter. The development of these plotlines would occur in alternation with the segments between Dr. Katz and his guests.

The show would end in a similar way each week: while Dr. Katz was in a session with a patient, music signaling the close of the show would begin to play. Katz would acknowledge it by saying, "Whoops, you know what the music means... our time is up" or some variant thereof.