The film begins with an image of an old vinyl playing "the longest-running radio play in history". Indistinguishable filtered voices can be heard in the recording. Eventually the scene fades into what appears to be a dimly lit hotel hall, where a man and a woman, both of whose faces are blurred beyond any recognition, stumble into a hotel room. Speaking Polish, the man asks the woman to undress, which she does reluctantly. As she does this, the man asks her if she knows what whores do, to which she replies "they fuck". Presumably the woman is herself a prostitute. Next, in another hotel room, a raven-haired woman, known only as the Lost Girl (Karolina Gruszka) sits crying while watching a television. On the television is an eerie sitcom about a family of rabbit-people in a small room who speak in terse, seemingly meaningless sentences, that are occasionally followed by a non-sequitur laugh-track. The female rabbit talks about a "secret" that apparently the male rabbit knows about. A knock at the door transpires. All three rabbits are captivated by it, and the male rabbit goes to answer it, but the knocker is not revealed. He walks out through the door and it closes behind him.
The Male Rabbit enters a dimly lit room, which then fades into a lavish golden room where a bald man sits on a couch. Another gruffly-looking Polish man stands talking to him. The seated man talks about seeking an opening, and the standing man juggles variations of the phrase "do you understand"?
Hollywood, California. An old woman with bulging eyes (Grace Zabriskie), walks down a suburban neighborhood, looking dizzy. She steps onto the porch of a high-class home and a butler answers. The home is that of Nikki Grace (Laura Dern), a well-known actress, and the old woman is let in, claiming she is a new neighbor and wishes to greet Nikki. She says she heard Nikki got a new part for a film called "On High in Blue Tomorrows". Nikki tells her it isn't for certain since the audition was very recent, but the woman insists she has gotten it. She then talks about a boy who opened a door and saw the end of the world, thus causing evil to be born. She then goes on to talk about a girl who got lost in an alley behind a marketplace, and then remembered something. Nikki is unsure what the woman is talking about. The woman then asks if there's a murder in the movie for which Nikki auditioned. Nikki says no. She continues by talking about the mixing up of time, yesterdays, todays, and tomorrows. She remarks that it may be 9:45 a.m. when it is in fact after midnight. She then points to the couch across from them and says that, if it were tomorrow, Nikki would be over there. We then pan to where the woman is pointing, and see Nikki receive her part via phone.
An indefinite time after she hears that she has gotten the part for the film, Nikki is seen with her co-star, Devon Berk (Justin Theroux) on "The Marilyn Levins Show", a program akin to "The View" and other celebrity programs. Marilyn asks both actors whether or not they will have an on-set affair, to which both Nikki and Devin respond negatively. Afterwards, Devin is told by his entourage that Nikki is "hands-off", since Nikki's husband is an extremely influential and powerful figure.
Afterwards on a studio soundstage, while reading through the script through with Devin, their director, Kingsley (Jeremy Irons) and his assistant Freddie Howard (Harold Dean Stanton) arrive where they tell Nikki and Devin that the film they are making is in fact a remake of an older unfinished Polish film called '47', which was abandoned since it was rumored that it was cursed. However, Kingsley assures them both that nothing will come of it. Later, while they are rehearsing a scene, there is a disturbance somewhere in the set. Devin goes to investigate the noise, but nothing is ever found. They continue running through their lines.
At this point, the film takes a drastic stylistic turn. Nikki's world begins to blend with that of the film they are making, putting into question whether or not the alleged "curse" is in fact real.
A woman with severe stomach wounds (who also plays the wife of Billy Side, a character in Nikki's film) tells a cop she is going to kill someone with a screwdriver.
Polish prostitutes confront various pimps while murder permeates their Polish city.
A mafia-like organization discusses one of their captives, remarking that the man claimed he was from "Inland Empire".
One day off the set, Nikki is shopping for groceries when she sees a door labeled "Axx o Nn", with an arrow pointing to a door. She passes through the door and enters a movie studio. She hears voices and begins running. She looks back: She sees herself seated with Kingsley, watching Devin chase her. She then realizes that SHE was in fact the intruder, and that she had watched herself sneak into the studio. Nikki evades exposure by hiding in a house found on the set, where she stays for most of the movie. When she enters the set house, it miraculously metamorphoses into an actual house somewhere in the suburbs. Nikki sees it is filled with prostitutes who are having a surreal party, and dancing to 60's music. She listens to their stories, smoking and donning their suggestive garb, eventually becoming one herself.
It slowly turns out that Nikki is in fact Susan Blue, the character that she portrays in the movie, who lives in a suburban home with her husband Smithy. Nikki (now called Susan) is at a backyard party with her husband where she asks friends to: "look at me, and tell me if you've seen me before". Susan wanders into a backyard dressed in a business suit and finds a man with a light bulb in his mouth. Frightened, she brandishes a screwdriver at him, and runs away.
Susan runs down Sunset Boulevard, attempting to flee a woman with a screwdriver (the same woman from earlier) who is attempting to kill her. Wandering the streets bloody and lost, while attempting to escape the treacherous woman, Susan hides in a nightclub, where she meets in a back room with a fat man with glasses known only as Mr. K (Erik Crary). She begins an epic and foul-mouthed monologue in which she unloads all her childhood scars, including being molested as a girl, where she gouged out the eye of her rapist.
Susan leaves the nightclub and runs down the street where the woman stabs her with the screwdriver and leaves her for dead. Susan wonders over to a closed down store where she collapses to the ground, coughing up blood and seeing three homeless people, a black man, a Hispanic woman, and a young Japanese woman starring at her. The Japanese woman, speaking with a very thick, almost inaudible accent, rambles on to Susan and her street friends about her friend Cassie who lives in Pomona and is a drug addict. Susan then dies, and.... Kingsley yells "Cut!" The entire event is revealed to be the movie's final scene shot, and the street people are really actors who walk off the set.
Susan, now turned back to Nikki, leaves the set and wonders down the Hollywood street to an old hotel where down a dark corridor, she finally confronts the standing man from earlier in the film, known now as "The Phantom". She shoots him, which causes his face to become hideously disfigured, at first becoming a disturbing copy of Nikki's own face, but eventually morphing into something closely resembling a fetus. We next go to the rabbits again, who are once more faced with the opened door.
Nikki then goes to the hotel room where the Lost Girl is being held, opens the door and with a bright light and kiss from Nikki, the Lost Girl is freed from her prison and disappears, as does Nikki. The Lost Girl returns to her home in the suburban San Fernando Valley where she is the real Susan Blue and she is reunited with her husband Smithy and her young son whom are happy to be back together at last.
The film ends with the group of prostitutes in a hotel lobby dancing to Nina Simone's "Sinnerman" with a beat from two lumbermen sawing a tree.