Opportunistic racketeering thrives in a damaged and impoverished Allied-occupied Vienna, which is divided into four sectors, each controlled by one of the occupying forces: American, British, French, and Soviet. These powers share the duties of law enforcement in the city.
American pulp Western writer Holly Martins (Joseph Cotten) comes to the city seeking his childhood friend, Harry Lime, who has offered him a job. Upon arrival, he discovers that Lime was killed while crossing the street just hours earlier by a speeding truck. Martins attends Lime's funeral, where he meets two British Army Police: Sergeant Paine (Bernard Lee), a fan of Martins' pulp novels; and his superior, Major Calloway (Trevor Howard), who says Lime was a criminal and suggests Martins leave town.
An official of the British occupying forces (Wilfrid Hyde-White) approaches Martins, requesting that he give a lecture and offering to pay for his lodging. Viewing this as an opportunity to clear his friend's name, Martins decides to remain in Vienna.
At a meeting with Lime's friend, "Baron" Kurtz (Ernst Deutsch), Kurtz tells Martins that after the accident he and Popescu (Siegfried Breuer) carried the dying Lime to the side of the street. Lime asked Kurtz and Popescu to take care of Martins and Anna Schmidt (Alida Valli), Lime's actress girlfriend.
To learn more, Martins goes to see Anna at the theatre where she is performing; she suggests Harry's death may not have been accidental. They question the porter at Lime's apartment building: Lime died immediately and was carried off the street by someone else in addition to Lime's two friends. Martins berates the porter for not being more forthcoming with the police about what he knows. Concerned for his family's safety, the porter indignantly tells Martins not to involve him. The police, searching Anna's flat for evidence, find and confiscate her forged passport and detain her.
Anna tells Martins that she is of Czechoslovak nationality from Sudetenland and will be deported from Austria by the Soviet occupying forces if discovered...