Electronics repairman Bobby Grady (John Laughlin), attends a group therapy session as a guest of his friend Donny Hopper (Bruce Davidson). Confounded by the "hang-ups" of the other attendees, Bobby boasts he has been happily married for 11 years to his high school sweetheart and they have two young children. However, someone in the group provokes Bobby, suggesting he is a bad lover, and he admits frustration about his infrequent sex life with his wife, Amy (Annie Potts).That night, Bobby returns home late from work and fends off Amy's complaints about money. To earn extra income, he arranges to do nighttime surveillance for Lou Bateman (Norman Burton), the owner of a sportswear company. Bateman suspects that Joanna Crane (Kathleen Turner), one of his most talented fashion designers, is stealing patterns and selling them to the competition. Although Bateman lacks evidence, he tells Bobby that he simply does not trust an ambitious, hard-working, and mysterious woman like Joanna.While following Joanna after work, Bobby discovers she changes into a wig and sexy dress to moonlight as a prostitute named "China Blue," working out of a room at the Paradise Hotel in downtown Los Angeles.On the sidewalk, Bobby videotapes her interaction with Peter Shayne (Anthony Perkins), a deranged street preacher, who is one of China Blue's regular clients. Besides visiting prostitutes, Shayne spends time in the red-light district attending peepshows, sniffing an inhalant, and giving frenzied sermons from his soapbox. He does not want sex, but pays China Blue her $50 hourly rate to talk, expressing a need to "save" her. However, Shayne also appears obsessed by her brazen sexuality, and claims he and China Blue share the same identity. The prostitute is intrigued to learn that the preacher carries a collection of sex toys in his bag, along with his Bible. From the hotel fire escape, Bobby eavesdrops on their conversation and snoops around when they leave, but finds no evidence of disloyalty to the sportswear company.After another Bateman employee confesses to selling the patterns, Bobby ends his surveillance of Joanna Crane and pays a professional visit to her alter ego, China Blue at her room at the Paradise Hotel. As Bobby and China Blue have sex, Shayne watches from a peephole in the wall. Afterward, Bobby admits that the experience was very special and intimate for him, but China Blue is reluctant to acknowledge the same and pretends Bobby is just another client. After Bobby leaves, Shayne stops by and offers China Blue another $50 to spend time with her. Irritated by the crazed preacher, she dresses in a nun's costume and taunts his self-righteousness.Outside at the hotel entrance, Bobby notices Shayne bullying China and tries to intervene, but Shayne knocks him to the ground. China appreciates Bobby's attempt to rescue her, while continuing to hide her affection for him.Later, Shayne attends a peep show and pretends to kill the stripper, using a blow-up doll.During a barbecue at the Grady residence, Amy is annoyed when Bobby performs his magic act entitled "HP" or the "human penis." The couple argues in bed that night, as Bobby confronts his wife about their troubled sex life. Amy is uncomfortable admitting that sex is not a priority to her and suggests they separate for a while.After moving out of the house, Bobby surprises Joanna at her apartment. Initially, Joanna is angry that a client followed her home and discovered her real identity, but by the time Bobby leaves, she appears receptive to his offer of friendship.Meanwhile, Joanna becomes aware that Peter Shayne is stalking her and knows about her life outside China Blue. During a confrontation at her office, Shayne reminds Joanna that they share the "same rage."Late one night, Bobby knocks on Joanna's door, hoping to talk. He complains about his marriage, but he also wants to discuss the special connection he feels with Joanna. However, she is afraid of disappointing him, admitting she is more comfortable with men as a prostitute. Joanna's fears subside when Bobby kisses her, and the two make love. Sitting in the bushes outside, Shayne fondles his sex toy and mutters to himself about Joanna/China Blue's redemption.As Bobby continues to date Joanna, Amy arrives at the electronics store, hoping to reconcile with her husband. She confesses to being lonely and reminds Bobby that he has a responsibility to his wife and children. When he appears indifferent, she surmises he is seeing someone else.Later, Bobby and Joanna argue when he leaves her apartment to have dinner with his family. Although Bobby reassures Joanna that he cannot return to his previous life, she resents his commitment to his wife and children, and doubts her ability to be in a relationship. After Bobby leaves, Shayne breaks in and knocks Joanna to the floor. He wants her to play a game called "exorcising the demons," to purge their shared "malignancy." After binding her hands to a drafting table, Shayne implies that he is going to kill Joanna and wields a large vibrator he calls, "superman." However, he begs Joanna to kill him. Meanwhile, Bobby arrives and hears the commotion inside the apartment. He breaks open the door, unaware that Shayne has disguised himself in China Blue's clothing, and is preparing to attack Bobby with a pair of scissors. Suddenly Joanna emerges from the shadows and fatally stabs Shayne with the superman vibrator.Sometime later, Bobby returns to the same group therapy meeting and announces that he and Amy have permanently separated. He says he is happy in his new relationship with Joanna, who saved his life and helped him confront his fears.