An actress's perception of reality becomes increasingly distorted as she finds herself falling for her co-star in a remake of an unfinished Polish production that was supposedly cursed.

A dark-haired woman (Laura Elena Harring) is left amnesiac after a car crash. She wanders the streets of Los Angeles in a daze before taking refuge in an apartment. There she is discovered by Betty (Naomi Watts), a wholesome Midwestern blonde who has come to the City of Angels seeking fame as an actress. Together, the two attempt to solve the mystery of Rita's true identity. The story is set in a dream-like Los Angeles, spoilt neither by traffic jams nor smog.

College student Jeffrey Beaumont (Kyle MacLachlan) returns home after his father has a stroke. When he discovers a severed ear in an abandoned field, Beaumont teams up with detective's daughter Sandy Williams (Laura Dern) to solve the mystery. They believe beautiful lounge singer Dorothy Vallens (Isabella Rossellini) may be connected with the case, and Beaumont finds himself becoming drawn into her dark, twisted world, where he encounters sexually depraved psychopath Frank Booth (Dennis Hopper)