Trelkovsky (Roman Polanski), a quiet and unassuming Polish immigrant living in France, rents an apartment in Paris whose previous tenant, Egyptologist Simone Choule, attempted to commit suicide by throwing herself out the third-floor window and through a pane of glass below. He visits Choule in the hospital but finds her entirely in bandages and unable to talk. Whilst still at Choule's bedside, Trelkovsky meets Simone's friend, Stella (Isabelle Adjani), who has also come to visit. Stella begins talking to Simone, who becomes aware of her visitors. Initially showing some signs of agitation upon seeing them, Choule soon lets out a disturbing cry, then suddenly dies. It isn't clear which of the two has caused this reaction. Apparently unaware that Choule is now dead, Trelkovsky tries to comfort Stella but dares not say that he never knew Simone, instead pretending to be another friend. They leave together and go out for a drink and a movie (Bruce Lee's Enter The Dragon), where they fondle each other. Outside the theatre they part ways.
As Trelkovsky occupies the apartment he is chastised unreasonably by his neighbors and landlord, Monsieur Zy (Melvyn Douglas), for hosting a party with his friends from the clerical office where he works, apparently having a woman over, making too much noise in general, and not joining in on a petition against another neighbor. Trelkovsky attempts to adapt to his situation, but is increasingly disturbed by the apartment and its tenants. He frequently sees his neighbors standing motionless in the toilet room (which he can see from his own window), and discovers a hole in the wall with a human tooth stashed inside. He receives a visit and a letter from one Georges Badar (Rufus), who secretly loves Simone and has believed her to be alive and well. Trelkovsky updates and comforts the man and spends the night out with him drinking at various bars around the city. Gradually he changes his breakfast habits like Simone and shifts from Gauloises to Marlboro cigarettes.
Trelkovsky becomes severely agitated and enraged when his apartment is robbed, while his neighbors and the concierge (Shelley Winters) continue to berate him for making too much noise... despite the fact that he appears to tiptoe around the apartment and watches his TV set without sound. He becomes hostile and paranoid in his day-to-day environment (snapping at his friends, slapping a child in a park) and his mental state progressively deteriorates as he isolates himself from society. One evening, he imagines himself being attacked by a derelict in the hallway of the lobby in his apartment building. He buys a wig and woman's shoes and goes on to dress up (using Simone's dress which he had found in a cupboard) and sits still in his apartment in the dead of night.
He begins to suspect that Zy and neighbors had driven the previous tennant, Simone, to commit suicide by harassing her, and in his increasingly twisted state of mind, believes that they are trying to subtly change him into Simone so that he too will kill himself. He has visions of his neighbors playing football with a human head in the apartment courtyard, and begins to see himself staring out of his own window and finds the toilet covered in hieroglyphs.
After a night of drinking at a local bar, Trelkovsky runs off to Stella for comfort and sleeps over at her apartment and confides in her about his fear that his neighbors are trying to kill him, but she calmly tells him that it is all in his mind. The next morning, after Stella has left for work, he concludes that she too is in on his neighbors' conspiracy when a delivery man arrives outside her apartment with a packaged delivery. In his twisted mind, Trelkovsky looks through the peakhole of the front door and sees Zy there. After the delivery man leaves, Trelkvosky proceeds to wreak havoc in her apartment before departing, and steals her hidden supply of money.
That evening, Trelkvosky is drinking at a local bar again when he makes the mistake of asking the barman where he can buy a gun. The barman and the manager throw him out of the bar from where the drunk Trelkvosky wanders into the street where he gets hit by a passing car driven by an elderly couple. The old man and woman stop and exit the car to check on him, and he is not wounded too seriously. An doctor appears and gives him a sedative injection due to his odd behavior. As a result, Trelkvosky perceives the elderly couple as landlord Zy and wife after which the couple return him to his apartment.
By this point, a deranged Trelkovsky dresses up again as a woman and throws himself out the apartment window in the exact same manner of Simone Choule, before what he believes to be a clapping, cheering audience composed of his neighbors in the courtyard. The suicide attempt, in fact, wakes up his neighbors (whom Trelkovsky sees as humanoid monsters decending upon him). The neighbors arrive at the scene together with the police just in time for the wounded Trelkovsky to crawl up to his apartment and jump one more time.
The end of the movie is enigmatic. Trelkovsky is bandaged up at the local hospital in the same fashion as Simone Choule in the very same hospital bed. When Trelkovsky looks up, two visitors come to visit him the next day. It happens to be Stella... and his own self standing before him in the exact same manner when Trelkvosky and Stella visited Simone in the hospital earlier. Trelkovsky then lets out the same disturbing scream that Simone had screamed. There is the possibility that this scene is not a flashback but that Trelkovsky is really Simone Choule and the whole supernatural cycle is about to start all over again.