Tom Welles (Nicolas Cage) is a surveillance expert on the rise. He's living the American dream with a wife, Amy (Catherine Keener), infant daughter, and a house in the suburbs of Harrisburg, Pennsylvania. After the completion of an assignment for a U.S. Senator, Welles is summoned to the house of a recently deceased captain of industry. His widow, in settling his estate, has discovered an 8MM film in her late husband's private safe. The silent short depicts the apparent murder of a young woman by a large, masked figure, what is known as a "snuff" film.

Greatly disturbed by the film's contents, the widow hires Welles to find the identity of the woman and determine if she is still alive. Welles finds the girl's identity and follows her trail from the time she ran away from home to Hollywood. Once there, Welles meets adult bookstore clerk Max California (Joaquin Phoenix) to act as Virgil to Welles' Dante. As the two begin their descent into the world of underground pornography, the detective grows more and more distant from his family, as if he cannot shake the taint of the world in which he now walks. Tom and Max eventually meet pornographers Dino Velvet (Peter Stormare) and Eddie Poole (James Gandolfini). By this time the detective finds he can no longer walk out of the inferno.