The novel opens outside a club called the Dancers. It is late October or early November 1949. Philip Marlowe meets a drunk named Terry Lennox, a man with scars on one side of his face. They forge an uneasy friendship over the next few months. In June 1950, Lennox shows up late one night at Marlowe's home in "a great deal of trouble" and needing a ride to the Tijuana airport. Marlowe agrees as long as Lennox does not tell him any details of why he is running.
On his return to Los Angeles, Marlow learns that Lennox's wife was found dead in her guest house and that she died before Lennox fled. Marlowe is arrested on suspicion of murder after refusing to co-operate with investigators, who want him to confess that he helped Lennox flee.
After three days of antagonizing his interrogators, Marlowe is released, the police explaining that Lennox has been reported to have committed suicide in Otatoclán with a full written confession by his side. Marlowe gets home to find a cryptic note from Lennox containing a "portrait of Madison" (a $5,000 bill).
Marlowe gets a call from Howard Spencer, a New York publisher, who asks him to investigate a case. One of Spencer's best writers, Roger Wade, has a drinking problem and has been missing for three days. Initially Marlowe refuses, but after Wade's wife, Eileen, also asks for Marlowe's help, he consents. Marlowe finds Wade in a makeshift detox facility in an isolated and soon to be abandoned ranch. He takes his fee, but the Wades' stories do not match.
The Wades each try to convince Marlowe to stay at their house to keep Roger writing instead of drinking, and though he refuses, he ends up making further trips to the house at their behest. On one such trip, he finds Wade passed out in the grass with a cut on his head. Mrs. Wade enters a sort of trance and attempts to seduce Marlowe, thinking him to be a former lover of hers who died ten years earlier in World War II.
Meanwhile, Marlowe is repeatedly threatened to cease his investigation of the Lennox case, first by a friend of Lennox's named Mendy Menendez, then by Lennox's father-in-law, the police, the Wades' servant (a Chilean named Candy), and Wade's wife. Marlowe also learns that Terry Lennox had previously lived as Paul Marston, who was previously married and had lived in England.
Wade calls Marlowe again, asking him to come by to have lunch with him. Wade drinks himself into a stupor, so Marlowe takes a walk outside. When he returns, Eileen Wade is ringing the doorbell, saying she forgot her key. Marlowe finds Roger Wade dead on the couch, apparently from suicide, but Eileen accuses Marlowe of killing her husband. Candy fabricates a story to implicate Marlowe, believing him to be guilty, but his claims are undermined in an interrogation.
Marlowe receives a call from Spencer regarding Wade's death and bullies Spencer into taking him to see Mrs. Wade. Once there, Marlowe grills her on the death of Terry Lennox's wife. Eileen first tries to blame it all on Roger, but Marlowe argues that she killed both Mrs. Lennox and Roger Wade and that Lennox was actually her first husband, presumed killed in action with British Special Air Service during the war. Eileen Wade leaves with no response. The next morning, Marlowe learns that she has killed herself, leaving a note confessing that she killed Mrs. Lennox and Roger Wade.
Marlowe refuses to let the story lie. He is assaulted by Menendez, who is arrested in a setup arranged by a police commissioner who served with Menendez and Lennox during the war. Finally, Marlowe is visited by a Mexican man who claims to have been present when Lennox was killed in his hotel room. Marlowe listens to his story but rejects it and offers his own version, ending with the revelation the Mexican man is none other than Lennox, who has had cosmetic surgery.