Act I
Ariel and Tupolski interrogate Katurian in a police room, adopting a good cop/bad cop routine with Ariel happily playing the bad cop. At first Katurian does not know why he is being questioned, and thinks he is under suspicion of running political messages against the totalitarian dictatorship through his stories. The detectives and Katurian discuss grisly stories involving children. Ariel leaves the room, and soon after Michal is heard screaming in the next room. Ariel returns, his hand covered in blood from apparently torturing Michal, and tells Katurian that Michal has just confessed to killing three children, in association with Katurian. The first two children were murdered according to the patterns of the stories "The Little Apple Men" and "The Tale of the Town on the River." Katurian denies the allegations, stating that although his stories are gruesome it is the job of a storyteller to tell a story.
In his own narrative, Katurian describes being raised by loving parents who encouraged him to write, and for many years he wrote very happy stories. However, at night he began to hear sounds of torture from the next room, and as a result he began to write more disturbing stories. One night, a note is slipped under the door, claiming that Katurian's brother has been tortured nightly for seven years as part of an artistic experiment to get Katurian to become a great writer. Katurian breaks down the door, only to find his parents, who were playing a trick on him, pretending to be torturing a child. However, when Katurian returns years later, he discovers his brother's dead body hidden under the mattress, clutching the manuscript of a beautiful story, better than any of Katurian's, which Katurian burns. Katurian interrupts his narrative to say that this ending was fabricated when he wrote the story: when he broke down the door, he found Michal still alive. Katurian smothered his parents with a pillow that very night in vengeance for his disabled brother and the abuse he suffered.
Act II
Katurian and Michal are together in a cell, Katurian just having been tortured. Michal reveals that he had not been tortured, but rather cooperated entirely with Ariel, even screaming when Ariel asked him to. At Michal's request, Katurian tells him the story of "The Pillowman", about a man made of pillows who convinces children to kill themselves so they can be spared a horrible future. Michal admits to having killed the children, claiming that Katurian told him to do it through his stories. Michal says that he murdered the third child after hearing Katurian's story "The Little Jesus", one of his most violent. Michal tells Katurian that he had read the written version of "The Writer and the Writer's Brother", and resented the changes from their lives, wishing that Katurian had written a happy ending for the two brothers. Katurian lulls Michal to sleep by telling him one of his happier stories, "The Little Green Pig", then smothers him to save him the pain of being executed. Katurian calls to the detectives, announcing his intention to confess to the crimes on the condition that his stories are preserved.
Katurian tells the others the story of "The Little Jesus", which was thought to inspire the third murder. A young girl believes that she is the second coming of Jesus, and blesses unsavory characters, to the dismay of her parents and annoyance of others. When her parents are killed in a horrific accident, she is sent to live with abusive foster parents. Annoyed by her pretensions, the foster parents crucify her and bury her alive so that she might rise again in three days, but she does not.
Act III
Katurian writes out a false confession and adds the names of his mother and father to the list of people he has killed. When Katurian sees how eager Ariel is to torture him, he guesses that Ariel was sexually abused by his father. Before Ariel can begin the torture, Tupolski tells them that the third child might still be alive and Ariel leaves to find her. When Ariel returns with the girl, she is not injured but covered with green paint, revealing that Michal had not reenacted the story of "The Little Jesus" but "The Little Green Pig." It is apparent to Ariel and Tupolski that Katurian was unaware of this and therefore could not have murdered the children like he confessed, but they decide to execute him anyway for murdering his parents and vow to destroy his stories. Before Ariel can execute him, Katurian tells them about the torture Michal suffered in order for Katurian to become a better writer. Tupolski shows no empathy and shoots Katurian in the head. Left alone with Katurian's stories, Ariel decides not to burn them.
