Police Lt. Leonard Diamond is on a personal crusade to bring down sadistic gangster Mr. Brown. He's also dangerously obsessed with Brown's girlfriend, the suicidal Susan Lowell. His main objective as a detective is to uncover what happened to a woman called "Alicia" from the crime boss's past.
Mr. Brown, his second-in-command McClure and thugs Fante and Mingo kidnap and torture the lieutenant, then pour a bottle of alcohol-based hair tonic down his throat before letting him go. Diamond eventually learns through one of Brown's past accomplices that Alicia was actually Brown's wife. The accomplice suspects that Alicia was sent away to Sicily with former mob boss Grazzi, then murdered, tied to the boat's anchor and permanently submerged.
Diamond questions a Swede named Dreyer, who was the skipper of that boat (but now operates an antiques store as a front, bankrolled by Brown). Dreyer denies involvement, but this doesn't prevent him from being murdered by McClure within seconds after he leaves the shop.
Diamond tries to persuade Susan to leave Brown and admits he might be in love with her. He shows her a photo of Brown, Alicia and Grazzi together on the boat. Susan finally confronts Brown about his wife and is told she is still alive in Sicily, Italy, living with Grazzi.
Brown next orders a hit on Diamond. However, when his gunmen Fante and Mingo go to Diamond's apartment, they mistakenly shoot and kill the cop's burlesque dancer girlfriend Rita instead. Diamond sees an up-to-date photo of Alicia but realizes it wasn't taken in Sicily (since there's snow on the ground). This leads Diamond to suspect Brown didn't kill Alicia but his boss Grazzi instead. Diamond is able to track Alicia to a sanitarium, where she is staying under another name. He asks for her help.
Brown's right-hand man, McClure, wants to take over. He plots with Fante and Mingo to ambush Mr. Brown, but ends up getting killed himself because they are loyal to the boss.
At police headquarters, Brown shows up with a writ of habeas corpus, effectively preventing Alicia to testify against her husband. Brown also brings a big stash of "money" to Fante and Mingo while they are hiding out from the police, but the box turns out to contain a bomb that apparently kills both.
Brown shoots the lieutenant's partner Sam and kidnaps Susan, planning to fly away to safety. Diamond finds a witness that could finally nail the elusive gangster—Mingo, who survived the blast and confesses that Brown was behind it all. Alicia is able to help Diamond figure out where Brown was likely to take Susan, a private airport where Brown intends to board a getaway plane.
However, the plane doesn't show up and the film climaxes in a foggy airplane hangar shootout. Susan shines a bright light in Brown's eyes and the lieutenant places him under arrest. The last scene shows the silhouetted figures of Diamond and Susan in the fog, considered to be one of the iconic images of film noir.