Soviet and Chinese soldiers capture a U.S. Army platoon during the Korean War, taking them to communist China. Three days later, Sergeant Raymond Shaw and Captain Bennett "Ben" Marco return to UN lines. Upon Marco's recommendation, Shaw is awarded the Medal of Honor for saving his soldiers' lives in combat, though two men were killed. Shaw returns to the U.S., where his mother, Eleanor Iselin, exploits his heroism to further the political career of her husband, Senator John Iselin. When asked to describe Shaw, the soldiers in his unit uniformly respond that he is the kindest, bravest, warmest, most wonderful human being they have ever known. In fact, Shaw is a strict, cold, unsympathetic loner hated by his men.

After Marco is promoted to major and assigned to Army Intelligence, he has a recurring nightmare: a hypnotized Shaw blithely murders two soldiers from his platoon before an assembly of communist military leaders to demonstrate their revolutionary brainwashing technique. Marco learns that Allen Melvin, a fellow soldier, has the same nightmare. When Melvin and Marco separately identify identical photos of the two male communist leaders from their dreams, Army Intelligence agrees to investigate.

During captivity, Shaw was programmed as a sleeper agent, who obeys orders to kill and immediately forgets having done so. His heroism is a false memory implanted during the brainwashing. Agents trigger Shaw by suggesting he play solitaire; the queen of diamonds activates him. Meanwhile, Eleanor is masterminding John's political ascent with his baseless claims that communists work at the Defense Department. To spite his mother and stepfather, Shaw takes a job at a newspaper published by Holborn Gaines, Iselin's harshest critic. Communist agents later have Shaw murder Gaines to confirm that his brainwashing still works.

Chunjin, a Korean agent who posed as a guide for Shaw's platoon, arrives at Shaw's apartment asking for work. The unsuspecting Shaw hires him as a valet and cook. Marco recognizes Chunjin when he visits Shaw; he violently attacks him and demands to know what happened during the platoon's captivity. After Marco is arrested for assault, Eugenie "Rosie" Cheyney, an attractive young woman he met on the train, posts his bail.

Shaw rekindles a romance with Jocelyn Jordan, the daughter of liberal Senator Thomas Jordan, the Iselins' chief political foe. Eleanor wants to garner Senator Jordan's support for Iselin's vice-presidential bid. Unswayed, Jordan insists he will oppose the nomination. After Jocelyn inadvertently triggers Shaw's programming by wearing a Queen of Diamonds costume at the Iselins' party, they elope. Furious at Senator Jordan's rebuff, Eleanor—who is Shaw's American handler—sends him to kill Senator Jordan at his home. Shaw also kills Jocelyn when she inadvertently happens upon the murder scene. Having no memory of the killing, Shaw is grief-stricken upon learning they are dead.

After discovering the queen of diamonds card's role in Shaw's conditioning, Marco uses a forced deck to deprogram him, hoping to learn Shaw's next assignment. Eleanor primes Shaw to assassinate their party's presidential nominee during the convention so that Iselin, as the vice-presidential candidate, will become the nominee by default. In the uproar, he will seek emergency powers to establish a strict authoritarian regime. Eleanor tells Shaw that she had requested a programmed assassin, never knowing it would be her own son. When taking power, she vows revenge upon her superiors for choosing him.

Disguised as a priest, Shaw enters Madison Square Garden, taking a sniper's position in a vacant overhead spotlight booth. Marco and his supervisor, Colonel Milt, race to the convention to stop Shaw. At the last moment, Shaw aims away from the presidential nominee and instead kills Senator Iselin and Eleanor. When Marco bursts into the booth, Shaw, wearing the Medal of Honor, says he was the only one who could stop his mother and stepfather, then kills himself. Later that evening with Rosie, Marco mourns Shaw's death