Temporarily blinded with his eyes bandaged, private detective Philip Marlowe (Dick Powell) is being interrogated by police lieutenant Randall (Don Douglas) about two murders.
He tells how he was hired by menacing Moose Malloy (Mike Mazurki) to locate Velma Valento, a former girlfriend, whom Moose lost track of while serving eight years in prison. They go the night club where Velma last worked as a singer but the owner died years before and no one remembers her. Marlowe tracks down alcoholic widow Jessie Florian (Esther Howard) who claims not to know what's become of Velma. However Marlowe finds a photo of Velma she hid from him, and she then says Velma is dead. Later, from a safe distance, Marlowe observes a clearly disturbed Jessie make a phone call.
The next morning the suave Lindsay Marriott (Douglas Walton) turns up at Marlowe's office, offering $100 if Marlowe will act as his bodyguard when he goes to a secluded canyon at midnight as a go-between to pay a ransom for some stolen jewels. In the canyon, Marlowe is knocked unconscious. Marlowe comes to when, in a delirious state, he sees a young woman shine a flashlight on his face and run away. The money is gone and Marriott has been viciously killed. When Marlowe reports the murder, the police make the mistake of asking him if he knows a Jules Amthor and warn him not to interfere in the case.
Posing as a reporter, Ann Grayle (Anne Shirley) tries to pry information out of Marlowe about the murder. She mentions that the jewels were jade and he sees through her. She introduces him to her wealthy father (Miles Mander) and his seductive second wife Helen (Claire Trevor). Grayle collects rare jade and was attempting to recover a necklace worth $100,000, robbed from Helen while she was out dancing with Marriott. Jules Amthor (Otto Kruger), a psychic healer who treated both Helen and Marriott, shows up just as Marlowe is leaving. Helen retains Marlowe to try to recover the jade but Anne tries bribing him off to keep out of it.
Moose Malloy forces Marlowe to go with him to "meet somebody," who turns out to be Amthor. Marlow suspects that Amthor and Marriott were in league, setting up Helen to get the jade, but something went wrong with the plot. Amthor duped Moose into doing his dirty work. Amthor has Marlowe beaten up and drugs him for three days, trying to find out where the necklace is, but Marlowe escapes and tells Moose how he has been tricked. Marlowe goes to Ann and realizes she was the young woman who shined the light on his face. They find a mutual attraction in each other. When the police ask Ann's father about the family beach house, which Marriott rented, Marlow goes there.
Helen is hiding there from the police. Marlowe deduces that she hired him only to set him up for Amthor's interrogations, and that Ann was trying to save him from the set-up with her bribe. Helen attempts to entice Marlowe into helping her murder Amthor, who is blackmailing her, by luring him back to the beach house the next night for the necklace. Marlow goes along but finds Amthor dead, his neck snapped by a strong pair of hands. Moose is waiting for Marlowe at his office. Marlowe shows Moose the photo he took from Jessie, and as he suspected, it is a fake intended to throw anyone looking for Velma off the track. Marlowe tells Moose to lay low until the next night, when he will take Moose to Velma.
At the beach house, Marlowe has Moose wait while he meets with Helen, who is really Velma, to find out what happened to the necklace but she pulls a gun on him. She faked the robbery and the ransom to kill Marlowe after being tipped off by Jessie that he was looking for her. She killed Marriott while Marlowe went down into the canyon and was about to kill Marlowe when Ann came along, worried that her jealous father might be trying to kill Marriott. As Helen is about to shoot Marlowe, a lovesick Grayle shows up with Ann. He takes Marlowe's gun and kills Helen. Moose hears the shot and finds his Velma lying dead. Enraged, Moose lunges for Grayle, who shoots him. Marlowe attempts to intercede as the gun goes off and is blinded by the flash. Three more shots are fired.
His story concluded, the blinded private eye is told that Moose and Grayle shot each other in a struggle for Marlow's gun. Marlow is escorted out of the building by a detective, not realizing that Ann was also there, overhearing every word, and expresses his attraction for her to the detective. In the back seat of a taxi cab, the bandaged Marlowe recognizes her perfume and they kiss.