At a mansion on Sunset Boulevard, a group of police officers and photographers discover the body of Joe Gillis, floating face down in the swimming pool. In a flashback, Joe relates the events leading to his death.

Six months earlier, Joe was a down-on-his-luck screenwriter, trying to interest Paramount Pictures in a story he submitted. Script reader Betty Schaefer harshly critiques it, unaware that Joe is listening. Later, while fleeing from repossession men seeking his car, Joe turns into the driveway of a seemingly deserted mansion inhabited by forgotten silent film star Norma Desmond. Learning that Joe is a writer, Norma asks his opinion of a script she has written for a film about Salome. She plans to play the role herself in her return to the screen. Joe finds her script abysmal but flatters her into hiring him as a script doctor.

Moved into Norma's mansion at her insistence, Joe sees that Norma refuses to accept that her fame has evaporated, and learns that her butler Max secretly writes the fan letters she receives. At her New Year's Eve party, he realizes she has fallen in love with him. Joe tries to let her down gently, but Norma slaps him and retreats to her room. Joe visits his friend Artie Green and again meets Betty, who thinks a scene in one of Joe's scripts has potential. When he phones Max to have him pack his things, Max tells him Norma cut her wrists with his razor. Joe returns to Norma and they become lovers.

Norma has Max deliver the edited Salome script to her former director Cecil B. DeMille at Paramount. She starts getting calls from Paramount executive Gordon Cole but refuses to speak to anyone except DeMille. Eventually, she has Max drive her and Joe to Paramount in her 1929 Isotta Fraschini. DeMille welcomes her affectionately and treats her with great respect, tactfully evading her questions about her script. Max learns that Cole merely wants to rent her unusual car for a film.

Preparing for her imagined comeback, Norma undergoes rigorous beauty treatments. Joe secretly works nights at Betty's office room, collaborating on an original screenplay. His moonlighting is found out by Max, who reveals that he was a respected film director who discovered Norma, made her a star, and was her first husband. After she divorced him, he abandoned his career to become her servant.

Norma discovers a manuscript with Joe's and Betty's names on it and phones Betty, insinuating that Joe is not the man he seems. Joe, overhearing, invites Betty to see for herself. When she arrives, he pretends he is satisfied being a gigolo. However, after she tearfully leaves, he packs for a return to his old Ohio newspaper job. He bluntly informs Norma there will be no comeback; her fan mail comes from Max, and she has been forgotten. He disregards Norma's threat to kill herself and the gun she shows him to back it up. As Joe leaves the house, Norma shoots him three times, and he falls into the pool.

The flashback ends. The house is filled with police and reporters. Norma, having lost touch with reality amid her arrest, believes the newsreel cameras are there to film Salome. Max and the police play along. Max sets up a scene for her and calls, "Action!" As the cameras roll, Norma descends her grand staircase and makes an impromptu speech about how happy she is to be making a film again, ending with the film's iconic line, "All right, Mr. DeMille, I'm ready for my close-up."