Mary Ann Simpson (Kathleen Turner) and Matty Tyler (Kim Zimmer) graduate together from Wheaton High School in Illinois. According to the yearbook, Mary Ann's goal is to be rich and live in an exotic land. She pursues her goal in a calculated, manipulative, and ruthless manner that includes a switch of identities.
The following synopsis describes events in chronological order, but the viewer learns many of the events only at the end of the movie.
Mary Ann Simpson gets involved in bad things after high school, but then sets her sights on wealthy Edmund Walker (Richard Crenna). She knows Walker will not marry her if he finds out about her past. She decides to adopt the identity of her high school classmate Matty Tyler. As Matty Tyler, she arranges to meet Edmund Walker. They get married and move to a waterfront estate in Pine Haven, Florida. Edmund travels frequently and is involved in many business dealings, including an investment in an abandoned beachfront hotel nearby.
Edmund's will leaves much of his estate to his niece. Matty Tyler Walker (the real Mary Ann) knows that if his will is invalidated for any reason, she would inherit all his estate as the surviving spouse under state law of intestacy. Matty devises a plan to murder Edmund and get all of his estate. To carry out the plan, she must find an attorney to commit the murder and forge a new, invalid will. She will then implicate the attorney as the murderer and kill him in what looks like an accident to end any further investigation.
Ned Racine (William Hurt) is a slightly disreputable attorney. One of the wills he drafted was invalidated and he was sued for legal malpractice. His best friends are prosecutor Peter Lowenstein (Ted Danson) and detective Oscar Grace (J.A. Preston).
At a party, Matty Tyler Walker meets an attorney who tells her about the legal malpractice case against Ned. Matty decides that Ned is the perfect target for her scheme. Matty arranges to meet Ned and they begin a hot affair. She eventually talks Ned into murdering Edmund. Ned gets advice on arson devices from his client Teddy Lewis (Mickey Rourke). Matty asks Ned to change Edmund's will and forge his signature. He refuses because he thinks it will attract attention.
As the murder plans develop, Ned makes a surprise visit to see Matty and finds another woman meeting with Matty. Matty introduces her as "Mary Ann Simpson," but unknown to Ned (or to the viewer) she is actually the real Matty Tyler. The real Matty Tyler has learned about Matty Tyler Walker's deception and is blackmailing her. Matty Tyler Walker must now alter her plans to also get rid of the real Matty.
On the night Edmund is to be killed, Ned goes to Miami and checks into a motel to give himself an alibi. He then drives back to Edmund and Matty's house and murders Edmund. He takes Edmund's body to the abandoned beachfront hotel and sets it on fire, hoping to make it look like Edmund tried to commit arson and was accidentally killed in the process. While Ned is gone setting the fire, Matty telephones the front desk of Ned's motel repeatedly and asks to speak with Ned. The front desk rings Ned's room but no one answers. Matty knows that Ned is not there and that his failure to answer the telephone calls will destroy his alibi.
After the murder and the fire, Ned is shocked to learn that Matty changed the will and made it appear that Ned was involved. The redrafted will is invalid and, as a result, all of Edmund's estate passes to Matty. When Edmund's estate is eventually settled, Matty sends all the money to a secret bank account overseas.
Oscar Grace and Peter Lowenstein investigate Edmund's death. They learn that Edmund's body was discovered without his glasses. If his glasses are found elsewhere, it would suggest he was murdered elsewhere and his body then taken to the hotel. They also discover the motel telephone records that show Ned did not stay in his Miami motel room the night of the death. They reluctantly begin to suspect their friend Ned.
Meanwhile, Matty Tyler Walker has developed a revised plan that will get rid of both Ned and the real Matty. The first part involves a made-up story that her former housekeeper has Edmund's missing glasses and is threatening to turn them over to the police unless she is paid off. If the glasses are kept from the police, there would still be a chance that Edmund's death would be ruled an accident rather than a homicide. The second part of the plan is to murder the real Matty and place her body in the boat house at her estate. The third part is to send Ned to the boat house on the pretext of recovering the glasses. The boat house will be rigged to explode a few seconds after the door is opened.
Before Matty can fully execute her plan, Ned happens to meet the attorney who originally told Matty about him. Ned suspects he has been set up. Then Teddy Lewis tells Ned that Matty had asked him questions about rigging a delayed explosion.
Matty Tyler Walker murders the real Matty Tyler and puts her body in the boat house. She then calls Ned and tells him the housekeeper has been paid off and has left the glasses in the boat house. Matty asks Ned to go to the boat house and pick them up. Ned goes to the the boat house, carefully inspects it, and sees the trip wire on the door. Matty arrives, expecting to find the boat house destroyed with the bodies of Ned and the real Matty inside. She is startled to see Ned alive and the boat house intact. Ned tells Matty that he has learned the truth. Matty denies it and swears that she really does love him. To prove his suspicions are unfounded, Matty says she will go down to the boat house by herself. Matty opens the boat house door and then, unknown to Ned, secretly dives into the water and swims away. The boat house explodes a few seconds later.
The dental records confirm that the real Matty Tyler's body was in the boat house. The police believe that Matty Tyler Walker and Ned were responsible for Edmund's death and that Matty Tyler Walker was killed in the boat house fire. Ned is charged with Edmund's murder and convicted. The fake Matty retrieves the money from the overseas account and moves to an exotic land. While in prison, Ned obtains a copy of the Wheaton High School yearbook and his suspicions about the switched identities are confirmed when he sees the photos of Mary Ann and Matty. He knows that Mary Ann Simpson/Matty Tyler Walker has succeeded in achieving her high school goal.