During a Friday afternoon tryst in a Phoenix hotel, real-estate secretary Marion Crane and her boyfriend Sam Loomis discuss their inability to get married because of Sam's debts. Marion returns to work, decides to steal a cash payment of $400,000 entrusted to her for deposit at the bank, and drive to Sam's home in Fairvale, California. En route, Marion hurriedly trades her car, arousing suspicion from both the car dealer and a California Highway Patrol trooper.

Marion stops for the night at the Bates Motel, located off the main highway. Proprietor Norman Bates descends from a large house atop a hill overlooking the motel, registers Marion under an assumed name she uses, and invites her to dine with him. Returning to his house, Norman has an argument with his mother, overheard by Marion, about Marion's presence. Norman returns with a light meal and apologizes for his mother's outbursts. Norman discusses his hobby as a taxidermist, his mother's "illness" and how people have a "private trap" they want to escape. Remorseful of her crime, Marion decides to drive back to Phoenix in the morning and return the stolen money hidden in a newspaper. As Marion showers, a shadowy figure appears, stabs her to death and leaves. Soon afterward, Norman's anguished voice is heard from the house yelling "Mother! Oh God, Mother! Blood! Blood!" Norman cleans up the murder scene, puts Marion's body, her belongings and the hidden cash in her car, and sinks it in a swamp near the motel.

Marion's sister Lila arrives in Fairvale a week later, tells Sam about the theft, and demands to know her whereabouts. He denies knowing anything about her disappearance. A private investigator named Arbogast approaches them, saying that he has been hired to retrieve the money. Arbogast learns that Marion spent a night at the Bates Motel. He questions Norman, whose nervousness and inconsistency arouse Arbogast's suspicion. When Norman implies Marion had spoken to his mother, Arbogast asks to speak to her, but Norman refuses. Arbogast updates Sam and Lila about his findings, and promises to phone again in an hour. When he enters the Bates home in search of Norman's mother, a figure resembling an elderly woman, emerges from the bedroom and stabs him to death.

When Lila and Sam do not hear from Arbogast, they visit the motel. He sees a figure in the house whom he assumes is Norman's mother; she ignores him. Lila and Sam alert the local sheriff, who tells them that Norman's mother died in a murder-suicide ten years earlier. The sheriff concludes that Arbogast lied to Sam and Lila so he could pursue Marion and the money. Convinced that something happened to Arbogast, Lila and Sam drive to the motel. Sam distracts Norman in the office, while Lila sneaks into the house. Suspicious, Norman becomes agitated and knocks Sam unconscious. As he goes to the house, Lila hides in the fruit cellar, where she discovers the mother's mummified body. She screams, and Norman, wearing his mother's clothes and a wig, enters the cellar and tries to stab her. Sam appears, and subdues him.

At the police station, a psychiatrist explains that a jealous Norman murdered his mother and her lover ten years earlier. He mummified his mother's corpse and began treating it as if she were still alive. He recreated his mother in his mind as an alternate personality, as jealous and possessive as she was in life. When Norman is attracted to a woman, "Mother" takes over: He had murdered two other young women before Mari