Arturo Bandini is a struggling writer living in a residential hotel in Bunker Hill, a rundown section of Downtown Los Angeles. Living off the zest of oranges, he unconsciously creates a picture of Los Angeles as a modern dystopia during the Great Depression era. His published short story "The Little Dog Laughed" impresses no one in his seedy boarding house except for one 14-year-old girl, Judy. Destitute, he wanders into the Columbia Buffet where he meets Camilla Lopez, a waitress.
Bandini falls in love with Lopez, who is herself in love with co-worker Sam. Sam despises Camilla, telling Bandini if he wants to win over Camilla, he has to treat her poorly. Bandini struggles with his own poverty, his Catholic guilt, and with his love for an unstable and deteriorating Camilla. Camilla is eventually admitted to a mental hospital, and moved to a second one, before escaping.
Bandini looks for her, only finding her as she awaits for him in his apartment. He decides to take her away from Los Angeles, and arranges to live in a house on the beach. He buys her a little dog and they go to the new place. He leaves her there, to get his belongings from his Los Angeles hotel room. When he returns, she's gone. He tracks her down to the desert home of Sam, who is ill and dying. Before Bandini arrives, Sam has thrown Camilla out and she wanders into the desert.
Bandini looks for her with an agonizing fear that he won't find the woman he loves, and he doesn't. He returns to Sam's shack, looks over the empty desert land. He takes a copy of the novel he had recently published, dedicates it to Camilla, and throws it into the desert.