Griffin Mill (Tim Robbins) is a studio executive dating story editor Bonnie Sherow (Cynthia Stevenson). He hears story pitches from screenwriters and decides which have the potential to be made into films, green-lighting only 12 out of 50,000 submissions every year. His job is endangered when up-and-coming story executive Larry Levy (Peter Gallagher) begins working at the studio. Mill has also been receiving death-threatening postcards, assumed to be from a screenwriter whose pitch he rejected.
Mill surmises that the disgruntled writer is David Kahane (Vincent D'Onofrio). Mill lurks around Kahane's home and is told by Kahane's girlfriend, June Gudmundsdottir (Greta Scacchi), whom he watches while talking to her on the phone, that Kahane is at a showing of 'The Bicycle Thief'. Mill goes to the theater, pretending to recognize Kahane in the lobby after the film, and offers him a scriptwriting deal, hoping this will stop the threats. The two go to a nearby bar and have some drinks. Kahane gets intoxicated and rebuffs Mills offer; he calls Mill a liar, pointing out that he knows Mill didn't really go to the theater to see 'The Bicycle Thief' because Kahane saw Mill wander in late and only catch the last five minutes of it, and denies responsibility for sending Mill the postcards. Kahane continues goading Mill about his job security at the studio. In the bar's parking lot the two men fight. Mill loses his balance and falls, and feeling threatened, kills Kahane, then makes the death look like a robbery gone wrong.
The next day, Mill receives another postcard. Mill attends Kahanes funeral and gets along with June; she knows none of the other mourners. Studio chief of security Walter Stuckel (Fred Ward) confronts Mill about the murder and says that the police know Mill was the last one to see Kahane alive. Detectives Avery (Whoopi Goldberg) and DeLongpre (Lyle Lovett) suspect Mill is guilty of murder. They question him and DeLongpre keeps an eye on him. Mill receives a postcard from the writer suggesting they meet at a club. While Mill is waiting, he is cornered by two screenwriters who pitch Habeas Corpus, a serious legal drama featuring no major stars and with a depressing ending. Mill's stalker never shows up for the meeting. Leaving the club, Mill receives a fax in his Range Rover from the stalking writer, advising him to look under his raincoat, where he discovers a live rattlesnake which he stops the car and flees.
The brush with death makes Griffin Mill realize he has feelings for June. Having persuaded Bonnie to leave for New York on studio business, Mill takes June to a Hollywood awards banquet and their relationship blossoms. Apprehensive that Larry Levy continues encroaching on his job, Mill phones Levy and invites the two writers to pitch Habeas Corpus. Mill convinces Levy that the scenario is good and the movie will be an Oscar contender. Mill's plan is to let Levy shepherd the film through production and have it flop. Mill will step in at the last moment, suggesting some changes to salvage the films box office, letting him reclaim his position at the studio.
Mill asks June to go away with him to Acapulco, and Bonnie confronts him about his relationship with June. At the airport, Griffin discovers DeLongpre with police officers patrolling the terminal. He pretends to have left his passport at home and suggests a change of plans to June, and the pair head for an isolated desert resort and spa. During their weekend, Griffin and June consummate their relationship. Mill receives a call from his attorney, who informs him that studio head Joel Levison (Brion James) has been fired, and the police want Mill to participate in a lineup. An elderly eyewitness has come forward who claims to have seen the murder and can identify the assailant. Mill gains a reprieve when the witness fails to identify him in the lineup.
One year later. Studio power players are watching the end of Habeas Corpus with a new, tacked-on, upbeat "Hollywood" ending. Mill's plan to "save" the movie has worked and he is head of the studio. June is now Griffin's wife and pregnant with his child. Bonnie objects to the changes and is fired, a decision Griffin does not overrule; he rebuffs Bonnie when she appeals her termination to him. Mill receives a pitch over the phone from a man who reveals himself as the postcard writer. The man pitches an idea about a studio executive who kills a writer and gets away with murder. Mill recognizes the pitch as blackmail and gives the writer a deal. The writers title for the film is 'The Player'.