An adaptation entitled The Lathe of Heaven produced by the public television station WNET, and directed by David Loxton and Fred Barzyk, was released in 1980. It was PBS's first direct-to-TV film production and was produced with a budget of $250,000. Generally faithful to the novel, it stars Bruce Davison as George Orr, Kevin Conway as William Haber, and Margaret Avery as Heather LeLache. Ursula K. Le Guin herself was heavily involved in the production of the 1980 adaptation, and has several times expressed her satisfaction with it.
PBS' rights to rebroadcast the film expired in 1988, and it became the most-requested program in PBS history. Fans were extremely critical of WNET's supposed "warehousing" of the film, but the budgetary barriers to rebroadcast were high: the station needed to pay for and clear rights with all participants in the original program; negotiate a special agreement with the composer of the film's score; and deal with theBeatles recording excerpted in the original soundtrack, "With a Little Help from My Friends", which is an integral plot point in both the novel and the film. A cover version replaces the Beatles' own recording in the home video release.
The home video release is remastered from a video tape of the original broadcast; PBS, thinking the rights issues would dog the production forever, did not save a copy of the production in their archives.
The book is set in Portland, Oregon in the year 2002. Portland has three million inhabitants and continuous rain. It is deprived enough for the poorer inhabitants to have kwashiorkor, or protein deprivation. The culture is much the same as the 1970s in the United States, though impoverished. There is also a massive war in the Middle East, with Egypt and Israelallied against Iran.
George Orr, a draftsman, has long been abusing drugs to prevent himself from having "effective" dreams, which retroactively change reality. After having one of these dreams, the new reality is the only reality for everyone else, but George retains memory of the previous reality. Under threat of being placed in an asylum, Orr is forced to undergo "voluntary" psychiatric care for his drug abuse.
George begins attending therapy sessions with an ambitiouspsychiatrist and sleep researcher named William Haber. Orr claims that he has the power to dream "effectively" and Haber, gradually coming to believe it, seeks to use George's power to change the world. His experiments with a biofeedback/EEGmachine, nicknamed the Augmentor, enhance Orr's abilities and produce a series of increasingly intolerable alternative worlds, based on an assortment of utopian (and dystopian) premises familiar from other science fiction works:
Each effective dream gives Haber more wealth and status, until late in the book where he is effectively ruler of the world. Orr's economic status also improves, but he is unhappy with Haber's meddling and just wants to let things be. Increasingly frightened by Haber's lust for power and delusions of Godhood, Orr seeks out a lawyer named Heather to represent him against Haber. Heather is present at one therapeutic session, and comes to understand George's situation. He falls in love with Heather, and even marries her in one reality; however, he is unsuccessful in getting out of therapy.
George tells Heather that the "real world" had been destroyed in a nuclear war in April 1998. George dreamed it back into existence as he lay dying in the ruins. He doubts the reality of what now exists, hence his fear of Haber's efforts to improve it.
Heather has seen one change of reality and has a multiple memory – remembering that her pilot husband either died early in the Middle East War or else died just before the truce that ended the war in the face of the alien threat. She tries to help George but also tries to improve the world, saying that the aliens should no longer be on the Moon. George dreams this, but the result is that they have invaded the Earth instead. In the resultant fighting, Mount Hood is bombed and the dormant volcano starts to erupt again.
They go back to Haber, who has George dream another dream in which the aliens are actually peaceful. For a time there is stability, but Haber goes on changing things. His suggestion that George dream away racism results in everyone becoming gray; Heather, whose parents were of different races, never existed in this new reality. George manages to dream up a gray version of her, married to him and with a less prickly personality. Mount Hood continues to erupt and he fears the world is losing coherence.
Orr has a conversation with one of the aliens, suddenly comes to understand his situation, and thereby gains the courage to stand up to Haber. Haber, frustrated with Orr's resistance, uses what he has learned from studying George's brain during his sessions of hypnosis and controlled dreaming, and decides to take on effective dreaming himself. Haber's first effective dream represents a significant break with the realities created by Orr, and threatens to destroy reality altogether. Orr is able to shut off the Augmentor – even as coherent existence is dissolving into undifferentiated chaos – reaching the "off" switch through pure force of will. The world is saved, but random bits of the various recent realities are now jumbled together. Haber's mind is left broken. Heather, presumably her original self, exists, though with only a slight memory of George.