Police cars race down Sunset Boulevard, a famous street in Los Angeles, where the lifeless body of Joe Gillis is found floating in the swimming pool of a palatial mansion. As the cops and press gather, Joe via voiceover announces his wish to give an honest retelling of the events leading up to his death and declares, “Let's go back about six months and find the day when it all started.”
Six months earlier: Joe is a struggling screenwriter with a few lackluster credits to his name, down on his luck and unable to find work. He attempts to talk Sheldrake—a powerful producer at Paramount Studio—into buying Bases Loaded, his latest script. This is scuppered by Sheldrake's script reader Betty Schaefer, who harshly critiques Bases Loaded. Joe then unsuccessfully attempts to borrow money from his friends and agent. With no money on hand and his car about to be repossessed, Joe’s only option appears to be leaving the bright lights of Los Angeles for a low-paying newspaper job in Ohio.
Joe escapes the car repo men chasing him across the city, but blows out a tire in front of a ritzy mansion on Sunset Boulevard. It looks deserted so he hides the car in the garage and goes inside to look around. The mansion is not as deserted as it appeared to be; a woman's voice calls out to Joe, thinking him to be a pet undertaker providing funeral arrangements for her dead pet chimpanzee. He is ushered inside by a mysterious butler, Max.
When Joe meets the house owner, he recognizes her as a long-forgotten star of the silent screen, Norma Desmond. Norma is intrigued to learn he is a writer and invites him to stay and take a look at a lengthy script she has written about Salome. She hopes the script will become the movie that resurrects her acting career. Joe thinks the script is terrible but opportunistically sweet-talks Norma into hiring him as her editor.
Joe is given the guest room over the garage. Aghast, he wakes up to find his clothes, books, typewriter, and other possessions moved into the mansion by Max. When Joe confronts Norma, he finds out that she paid his overdue rent without his knowledge. Joe doesn't like Norma’s exerted dominance over him, but he eventually accepts the ordeal. He then realizes Norma is completely unaware of her faded stardom; she has no idea that the public has forgotten about her. She refutes criticism of her script and persuades Joe to spend his evenings watching her old films, during which she criticizes new Hollywood and its reliance on dialogue.
Over the next few weeks, Joe’s free will essentially vanishes. His car gets towed and taken away, and Norma becomes rather obsessed with him. She showers him with gifts, including a bespoke tuxedo and Vicuna topcoat. A great December rain leaks through Joe’s room and forces him to relocate to a room in the main house previously used by Norma’s three ex-husbands. While moving in, Joe points out the lack of locks, sleeping pills, and razor blades in the house, and Max reveals this absence is due to Norma’s fragile mental state and previous suicide attempts. Max then heavily implies that he regularly writes Norma’s fan mail to feed into her illusions of enduring public adoration.
For New Year’s Eye, Norma arranges a grand, private party for her and Joe, where she confesses her love for him. At first, Joe tries to decline her advances gently, but he comes to accuse her of taking advantage of him. Norma angrily reacts to his rejection and slaps him. Believing his time at the mansion to be over, Joe flees to another party hosted by his friend, Artie Green. Here, he encounters the script reader Betty—Artie’s soon-to-be fiance—again. Though still underwhelmed by Joe’s writing, she compliments the thematic potential of a particular scene in one of his stories. Betty has ideas for the script, and Joe agrees to work on it with her and calls the mansion to let Max know he is moving out. His plans change, however, when Max tells him that Norma has tried to kill herself using Joe's razor. Joe rushes back to the mansion and makes love to Norma by way of an apology—the point of no return for Joe’s status as a gigolo.
Norma considers the script for Salome complete and sends it off to Cecil B. DeMille at Paramount Studio. She eagerly anticipates his answer and soon, the studio starts calling but Norma refuses to talk to the caller—an executive named Gordon Cole—because she will only talk to DeMille himself. She orders Max to drive her and Joe to the studio, where she is welcomed back by many of the older hands and technicians who worked there in her heyday. Joe spots Betty and they briefly swap ideas about the script, but Joe abruptly leaves per Max’s demands. Max discovers the studio contacted Norma only because they want to rent her rare luxury car, a 1929 Isotta-Fraschini. They have no interest in her or the script, and Max wants to hide these facts from Norma to protect her oblivious, delicate ego.
Norma prepares for her comeback with a barrage of intense beauty treatments; in the meantime Joe begins to work secretly with Betty on the screenplay at nights. Betty and Artie have become engaged but Betty falls for Joe as they spend time working together. Joe is attracted to Betty but restrains himself, partly because she’s engaged and partly he does not want to abandon his now comfortable life with Norma. After one night of writing, a sinister Max approaches Joe and confesses his former status as a respected director who discovered Norma and made her a star. He is her ex-husband and willingly returned to her as a servant—life without her was unendurable.
Norma finds the script with Betty's name on it and calls her, telling her that Joe is a user and not a good man. Joe takes the phone and invites Betty to the mansion to witness this for herself. Joe feigns fulfillment with his life as a gigolo when Betty arrives to upset her and extricate himself from the complicated love triangle. Betty leaves in tears. With this newfound revelation concerning the toxicity of his living situation and Hollywood, Joe prepares to leave Norma and return to Ohio. He brutally tells Norma there is no comeback, no script, and no fan letters. He upsets her so much she threatens to shoot herself, but in a moment of passion she instead shoots Joe, leaving him floating in the pool.
Joe, still narrating, brings us back to the scene of the crime and says that he is worried how the ignominy and scandal will affect Norma's state of mind. Norma becomes delusional, believing the news cameras are actually a film crew waiting for her. To help the police in getting her downstairs, Max calls out "Action!" at which point Norma sweeps dramatically down the staircase, makes a short speech about how happy she is to be back in movies, and delivers the movie's most famous line, "All right, Mr. DeMille, I'm ready for my close-up."
