On a rainy night in 1928 in a Pennsylvania factory town called Iverstown, Martha Ivers (Janis Wilson), thirteen years old, is trying to escape from the guardianship of her wealthy, domineering aunt. Her friend, the street-smart, poor Sam Masterson (Darryl Hickman), comes for her through her bedroom window, but Martha's aunt catches them. While Sam slips out unnoticed, Martha hits Mrs. Ivers on the head, causing her to fall down the long staircase and die. Though Sam saw nothing, the event was witnessed by Walter O'Neil (Mickey Kuhn), the son of Martha's tutor (Roman Bohnen), known as Mr. O'Neil. Martha lies about the incident to Mr. O'Neil, and Walter supports her.
Mr. O'Neil suspects what happened but presents Martha's version of events to the police, that an intruder is responsible; he makes use of his knowledge by having her marry his son. When the police identify a former employee of the aunt as the murderer, the two O'Neils and Martha help convict him; he is punished by hanging.
Eighteen years later, the older O'Neil has died. Walter (now played by Kirk Douglas) is the district attorney, while Martha (Barbara Stanwyck) has used her inheritance from her aunt to build a large business empire. Their marriage is one-sided; he loves her, but she does not love him.
Sam (Van Heflin), now a drifter and gambler, stops in the small town by chance to have his car repaired after an accident. While waiting for repairs, at his old home, now a boarding house, he meets Antonia "Toni" Marachek (Lizabeth Scott), who has just been released from jail. She is later picked up for violating her probation by not returning to her hometown. Sam goes to see Walter, to see if he can use his influence to get her released.
Walter is convinced Sam has returned with blackmail in mind, giving Walter a motive to run Sam out of town. When Martha reacts with joy to the news of Sam's return, Walter's jealousy provides an additional motive. Walter forces Toni to set Sam up. Sam is beaten and driven out of town, but he is too tough to be intimidated. When all else fails, Walter makes a half-hearted attempt to kill Sam himself, but is easily disarmed. Martha then inadvertently blurts out the couple's fears of blackmail, which prove to be groundless: Sam says he did not witness the death. Martha breaks down and laments that he left without her all those years ago, taking with him her only chance for love and freedom.
Sam is torn between his old love and his new. Although he eventually forgives Toni for betraying him, he and Martha spend an idyllic day together, rekindling his feelings for her.
Walter arranges to meet Sam to finally settle matters. Before Sam arrives, Walter gets drunk and Martha finds out about the meeting. When Walter falls down the stairs and is knocked unconscious, Martha urges Sam to kill him. Sam instead brings Walter around. Martha pulls out a gun and threatens to shoot Sam in "self defense" as an intruder. However, Sam gambles that Walter will not back up her story; he turns his back on her and leaves.
Walter embraces and kisses his wife; then he points the gun at her midriff. Oddly relieved, she puts her hand over his hand on the trigger and presses. As she is dying, she defiantly states her name is not Martha Ivers, but Martha Smith. Outside, Sam hears the shot. He runs back toward the mansion, but sees Walter, holding Martha's body, shoot himself. Sam and Toni drive away together.