After a years of respect, it was Daniels' portrayal of Bernard Berkman, a cynical, self-obsessed New York writer in the midst of an angry and bitter divorce that earned him the best reviews of his life.
"The Squid and the Whale" represented a very different kind of role for an actor who's been criticized for being too clean-cut too "vanilla," maybe even too nice.
"I think it renewed my membership in the serious, important actors club. I think I lost it for a while -- happily lost it -- because I'd done "Dumb and Dumber,'" Daniels says.
Ironically, it was Daniels' silliest role, as the dumber half of "Dumb and Dumber," that really got him noticed.
And now, Daniels is indulging his silly side again. His latest movie, "RV," opens in a few weeks, a big family movie with Robin Williams.
As he toured his old high school in Chelsea, Daniels recalled his first foray into acting.
Daniels was a high school jock, but the drama teacher saw something else in him.
Walking down the hallway past the auditorium after a grueling basketball practice, Daniels remembered the school's drama teacher yelling, "'Jeff, get in here.' "And I walked in here and never looked back," he says.
As soon as he could, Daniels headed for the bright lights of Broadway discovering what it was like to be a very small fish in a very big pond.
"I thought I was pretty good then you go to New York and find out everybody's pretty good," Daniels says.
It was partly to make a place for other small-town actors with big-time dreams that inspired Daniels to found a theater in Chelsea, the Purple Rose.
"I wanted to create a place that was a home, a home for the new American play," Daniels says of the theater.
Some of those new American plays Daniels writes himself.
"I want the guy who loved 'Dumb and Dumber.' I want that guy sitting in my audience. And that doesn't mean you have to lower the bar," Daniels says.
The theater has rejuvenated the little town of Chelsea, and is sold out most nights.
It's all part of who Jeff Daniels really is: a big-time star who never left his small town behind.