The novel opens on an overcast morning in mid-October. It is thundering, foreboding rain. Philip Marlowe, a tough, cynical, yet honest private detective, is hired by the old, ailing General Sternwood to help him "take care of" Arthur Gwynn Geiger, a homosexual (possibly bisexual) pornographer who has been blackmailing the General with potentially scandalous pictures of the General's daughter, Carmen Sternwood. Marlowe agrees to the task.
Marlowe's first assignment becomes complicated by and intertwined with a second plot, which also has its roots in the initial meeting with Sternwood. General Sternwood mentions, peripherally yet implicitly, the disappearance of his well- liked, ex-bootlegger son-in-law, Rusty Regan. Rusty had been married to the General's eldest daughter, Vivian Sternwood.
Marlowe's first action is to stake out Geiger's shop, which turns out to be a pornography racket disguised as a rare bookshop. After pinpointing Geiger, Marlowe follows the man to his house and hides in wait outside. The night is rainy and Marlowe sees that Carmen Sternwood has gone inside Geiger's house. There is suddenly a flash and a scream, which turns out to be the flash of a camera and Carmen's reaction to the flash.
When Marlowe approaches Geiger's house to see what is happening, three gunshots ring out inside the house, followed by the rapid footsteps of the escaping gunman. Entering Geiger's home, Marlowe sees that Carmen is drugged and naked, sitting on a chair. Geiger, who had been taking pictures of Carmen, is dead at her feet. The plateholder of the camera—which ostensibly contains the pictures Geiger had taken of Carmen—is missing. Carmen seems unaffected by what has transpired, and is in fact giggly, as she is so high on ether.
Later, Owen Taylor, the Sternwoods' chauffeur, is found dead in the Pacific Ocean, near the fishing pier in Lido. It is unclear whether Taylor's death is a murder or suicide. As the plot unfolds, Marlow begins to figure out that Taylor was in love with Carmen Sternwood, and that it was Taylor who killed Geiger in retaliation for the naughty pictures of Carmen that Geiger had taken.
Owen Taylor's death is not the only death linked to Geiger. Another character, Joe Brody, appears and is eventually murdered. Brody and Agnes Lozelle, an employee of Geiger, have been plotting a takeover of Geiger's smut racket. Brody is also in possession of the negatives and prints of the scandalous pictures of Carmen Sternwood—pictures he uses to bribe Carmen's sister, Vivian, for money. Later, when Marlowe tries to retrieve information from Brody as well as the pictures of his client's daughter, Brody is murdered by Carol Lundgren.
Carol Lundgren, Geiger's homosexual lover, kills Brody because he thinks Brody killed Geiger. Lundgren is imprisoned for the murder. Agnes is released from custody. The pictures are returned to Marlowe, who takes care that they do not fall into the wrong hands again.
Ultimately, the newspapers release the story of the blackmail, but in a form that is nothing like the true story. Marlowe's job is technically over, as he has taken care of Geiger and the blackmailing. However, Marlowe, still curious about Rusty Regan's whereabouts, does not see himself as finished. Marlowe thinks that perhaps the General believed Regan was somehow involved in the blackmailing plot and that the General wanted to confirm whether or not this is true. The second plot, that of Regan, begins to unfold as the other—that of the blackmailing—is seemingly brought to a close.
Meanwhile, Marlowe realizes he is being followed by a man in a gray Plymouth sedan. The man, who turns out to be Harry Jones, has information about where Mona Grant, Eddie Mars's wife, is being kept in a hideout. Because rumors abound that Regan has run away with Mona, Marlowe considers it significant to find out her whereabouts. Marlowe finds that Mona had not actually run away with Regan; instead, her husband, Eddie Mars, has kept her in hiding for his own protection, to keep everyone thinking that Regan is alive and has run off with Mona. Harry Jones, who has paired up with Agnes Lozelle, offers this information to Marlowe, but Jones is murdered the process by Lash Canino, Eddie Mars's vicious gunman.
Once Marlowe knows where Mona is he ventures out to find her. He arrives at the hiding place, where he is beaten by Canino and handcuffed. Marlowe shares a scene with Mona, whom he nicknames Silver-Wig because of her platinum wig disguise. Marlowe is attracted to Mona. They have a moment together and they kiss. She seems to be a good person, but Marlowe cannot manage to sway her away from her loyalty to Eddie Mars. Nevertheless, Mona helps Marlowe escape from his ropes and, later, helps him kill Canino.
Everything comes to an end when Marlowe returns Carmen Sternwood's gun—the gun Carmen had used to try to persuade Brody to return her pictures to her—to her, and Carmen asks Marlow to teach her to shoot. Down in the abandoned Sternwood family oil field, Carmen turns her gun on Marlowe in an attempt to kill him. Marlowe, however, foreseeing this turn of events, has loaded the gun with blanks. He figures out, in the end, that Carmen killed Regan and that Vivian paid Eddie Mars's man, Canino, to hide the body. Regan has thus been dead throughout the entire novel, lying at the bottom of an oil sump on the Sternwood fields.
Marlowe solves the puzzle, allowing Vivian to go free as long as she gets Carmen the help she needs to alleviate her insanity. Eddie Mars never receives just retribution. Marlowe and Vivian promise not to tell the General about Regan because it would break his heart. The novel ends with Marlowe's thoughts about death—"the big sleep"—as an escape, and with his thoughts of Silver- wig.
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