College student Jeffrey Beaumont returns home to the small logging town of Lumberton when his father suffers a heart attack. After visiting the hospital, Jeffrey finds an amputated human ear in a vacant lot, and takes the organ to police detective John Williams, whose daughter, Sandy, was an underclassman at Jeffrey’s former high school. As Det. Williams takes over the case, Jeffrey plies Sandy for information, and she reports that a mysterious singer named Dorothy Vallens is somehow involved. They drive to her apartment building, which is located near the field in which the ear was discovered. The following day, Jeffrey picks Sandy up from school, and plots to covertly survey Dorothy Vallens’s apartment by pretending to be a pest exterminator. Dorothy allows Jeffrey inside, but his ruse goes awry when a man dressed in a yellow suit arrives, and Jeffrey steals a spare key to return later. That night, Sandy and Jeffrey watch the chanteuse perform the song “Blue Velvet” at a local nightclub, and drive back to her apartment before the performance ends. Sandy, who is terrified by Jeffrey’s homespun investigation, promises to honk the car horn if she sees Dorothy return. Inside, Jeffrey is overwhelmed by the urge to urinate and does not hear Sandy’s alarm when he flushes the toilet. Heeding Dorothy’s approach, Jeffrey hides in the living room closet and peers through its wood-slat door as she undresses, and answers a telephone call from a deranged, sadistic tormentor, Frank Booth. The conversation leads Jeffrey to believe that Frank has aligned himself with Dorothy’s estranged husband, Don, and has kidnapped their young son, Little Donny. Finishing the call, Dorothy is terrified to find Jeffrey in her closet. She threatens him with a knife, orders him to strip naked, and seduces him, but Frank arrives unexpectedly and Jeffrey returns to the closet. He watches through the slats as Frank becomes psychologically unhinged, inhaling drug vapors through a gas mask, simulating sex, and slapping Dorothy while referring to her as “Mommy.” When Frank leaves, Jeffrey consoles the frenzied singer, and she propositions him for sex. Jeffrey is intrigued, but recoils when she orders him to hit her. The next evening, Jeffrey gives Sandy a chaste description of the encounter, leaving out the sex, and speculates that Frank cut off the ear of Dorothy’s husband. Sandy, who has led an idyllic and sheltered life, is devastated to learn about the sinister nature of humanity, and describes a dream she had the night she met Jeffrey. In her vision, the darkness of the world turned to light when thousands of robins, the birds of love, were liberated from captivity. Sometime later, Jeffrey returns to Dorothy’s nightclub, follows Frank home, and begins to conduct surveillance, taking photographs of various associates, including the man in the yellow suit from Dorothy’s apartment, who he calls the “Yellow Man,” and a figure in a “well-dressed man disguise.” Reporting back to Sandy, Jeffrey suspects the transactions are drug-related, as a dealer was killed nearby, and a girl’s legs were broken. While Sandy is aghast at Jeffrey’s discoveries, he remains exhilarated, and explains he is finally able to see mysterious aspects of life that were previously concealed. He confesses that Sandy is one such “mystery,” and kisses her, but she begs him to respect her innocence. That night, Jeffrey makes love to Dorothy, and reluctantly submits to her masochistic desires. As they bid each other farewell, Frank arrives and orders Jeffrey to join his gang for a “joy ride” in his car. They speed to a brothel called “This Is It,” where Dorothy is permitted to visit her son, and an effeminate host named Ben serenades Frank with his favorite song, “In Dreams.” Frank loses patience and declares it is time to resume his journey of sexual conquest. Back on the road, Frank fondles Dorothy’s breasts and Jeffrey punches him in protest. Frank drags the boy out of the vehicle at knifepoint, applies lipstick, and kisses him. Threatening to possess Jeffrey in his dreams, Frank beats the young man until he loses consciousness. Jeffrey awakens alone in a lumberyard, stumbles home, and telephones Sandy, who convinces him to reveal his findings to her father. Looking for Det. Williams at the police station, Jeffrey is shocked to discover that Williams’s partner, Tom Gordon, is Frank’s associate, the “Yellow Man.” Jeffrey takes his photographs to the Williams home to reveal them to Det. Williams in private, and promises to end his amateur investigation. When Jeffrey returns to the house for a date with Sandy, he finds Det. Gordon fraternizing with the family and fears Det. Williams is also allied with Frank, but the officer quietly assures him that he is still on the case. Sandy takes Jeffrey to a high school party, where they kiss on the dance floor, and declare their love. However, their bliss is suspended when a car chases them home, and Jeffrey believes Frank is coming after him. Pulling over, he discovers the stalker is Sandy’s jilted boyfriend, Mike, who challenges him to a fight. Just then, Dorothy limps toward them in a stupor, naked and bruised. As Jeffrey embraces her and guides her to his car, Sandy wonders why the woman is so intimate with her paramour. Back at the Williams house, Dorothy calls Jeffrey her “secret lover,” and tells Sandy that he “put his disease in me.” Sandy is grief-stricken, and sobs in her mother’s arms. While paramedics take Dorothy away, Sandy hits Jeffrey, but she later forgives him when he calls from a hospital pay phone. Jeffrey orders Sandy to send her father to Dorothy’s apartment and heads there himself, only to discover a gruesome crime scene. Det. Gordon, aka the “Yellow Man,” stands in rigor mortis with a lethal gorge in his skull, and Dorothy’s husband, Don, who is missing an ear, is sitting nearby with a deadly gunshot to his head. A police radio in Gordon’s coat pocket alerts Jeffrey to a raid at Frank’s warehouse, and he decides to finally relinquish his obsession with the case. As Jeffrey leaves, however, he sees the outlaw in the “well-dressed man disguise,” and realizes the imposter is Frank. Rushing back to Dorothy’s apartment, Jeffrey grabs Det. Gordon’s radio and hides in the bedroom, transmitting his whereabouts to Det. Williams. He suddenly remembers that Frank has a radio, too, and is listening to his report. Jeffrey drops the intercom and runs to the living room. As Frank searches the bedroom, Jeffrey snatches Det. Gordon’s gun and returns to his hiding place. Frank realizes he has been deceived and storms toward the closet, where Jeffrey shoots him through the forehead. Just then, Sandy arrives with her father, who assures the boy that the nightmare has ended. Sometime later, Jeffrey awakens in his backyard, and Sandy calls him inside for lunch. His father has returned home from the hospital in good health, and a robin perches in the kitchen window with a beetle in its beak, restoring light and love to Lumberton. At a park, Dorothy embraces her young son.