In San Francisco, California, ex-convict Bernice "Bernie" Rhodenbarr (Whoopi Goldberg) now runs a used bookstore on Haight Street, but still does the occasional burglary on the side because crooked policeman Ray Kirschman (G.W. Bailey) is blackmailing her so he can get a take of her loot. After she steals a valuable stamp, Kirschman tells Bernie that the man she was stealing it for died the night before, so they will not get any payout for the job.Bernie tries to pawn the stamp, but Mr. Paggif (Nathan Davis), the pawnshop owner, is not interested. However, Paggif knows a dentist who can use Bernie's services. Bernie goes to see Dr. Cynthia Sheldrake (Leslie Ann Warren) who says her ex-husband, Christopher Marshall, took all her jewelry from their safety deposit box when they separated and she wants it back. Sheldrake agrees to pay Bernie $25,000 and gives her a key to Marshall's Nob Hill apartment.That night, Bernie breaks into the apartment and easily finds the jewelry hidden in a frozen food box in Marshall's freezer, but while searching for other things to steal, Marshall returns. Bernie hides in the back of a bedroom closet while she overhears Marshall having sex with an unseen woman. After the unknown woman leaves, Bernie hears a man come in and stab Marshall. When Bernie comes out of the closet, Marshall is dead and her briefcase containing the jewels is gone.The next day, Cynthia Sheldrake is arrested for murdering Christopher Marshall because the ice pick-like murder weapon is actually a specialized dental instrument. Sheldrake tells police that a black woman who was in her office a few days earlier could have stolen the dental instrument. When the police come to Bernie's apartment to question her, she bolts the door and hides behind a secret panel in the back of her closet to elude them. The police cannot find any evidence in Bernie's apartment, but consider her a suspect in the murder.At the aquarium, Bernie meets with Sheldrake's lawyer, Carson Verrill (James Handy), who advises her to leave town, but Bernie wants to clear her name. She calls crooked cop Ray Kirschman for help, but he refuses. Since Bernie saw many matchbooks from local bars in Marshall's apartment, she goes to those bars to see what she can learn.At Parker's on Fifth, Bernie finds a man who says Marshall slept with lots of women, as well as men. Bernie then goes to the Mayday bar, where she finds a woman named Frankie (Elizabeth Ruscio) who dated Marshall. Frankie reports that Marshall was friendly with an artist named Graybow (Vyto Ruginis) and that he also had a business partnership with a man who hung out at Parker's on Fifth. When Bernie goes to talk to Graybow, she sees that he has many artists' tools and also dental instruments like the one that killed Marshall.Bernie breaks into the apartment of a man named "Knobby," who works as a bartender at the Mayday bar, and finds a briefcase with $500,000 in cash. Then she returns to Graybow's apartment and breaks in.Afterward, Bernie tells Ray Kirschman she knows who killed Marshall and wants him to broker an immunity deal for her. Kirschman meets with the cops investigating Marshall's murder, saying that Graybow is the murderer, explaining that he not only had dental instruments like the one that killed Marshall, he also had plates for printing counterfeit money. He explains that Graybow would bleach the ink off of $1 bills and then print phony $100 bills. Police do not believe this story since Graybow was murdered the night before.When Kirschman meets Bernie in a restaurant, she tells him that the bartender, Knobby, must be the one who murdered Graybow. However, she quickly realizes Kirschman has set her up and she is about to be arrested. She slips out the bathroom window and steals a police motorcycle to get away. While the police chase her, she eludes them, then goes to the Mayday where she learns Knobby is dead.Upon her release from jail, Cynthia Sheldrake and her lawyer, Carson Verrill, return to her apartment and find Bernie waiting for them with a gun. Bernie says that Christopher Marshall was in the counterfeiting business and that whoever killed him took her briefcase filled with jewelry, thinking it was filled with counterfeit money. Upon smelling Sheldrake's perfume, Bernie recognizes her as the woman with Marshall the night she hid in the closet. Sheldrake admits she indeed slept with Marshall that night, but did not murder him. Bernie says she distinctly heard a man's voice just before Marshall was murdered. When Verrill dismisses her ideas, Bernie realizes he is the murderer.The next day, Bernie telephones Verrill's law firm saying she has a witness who can prove he killed Marshall. She wants her briefcase returned and then she will leave for South America. Bernie arranges to meet Verrill at the Stern Grove park at 2 p.m. When Verrill arrives, Bernie brings out Frankie, the woman from the Mayday bar. Bernie says that Verrill was the man who was having an affair with Marshall and Frankie confirms that Marshall used to talk about his plans with Verrill during pillow talk with her. Verrill admits to the affair, then stabs Frankie with a dental instrument, but hits Frankie's purse rather than her body. Kirschman chases Verrill, while Bernie's neighbor, Carl Hefler (Bobcat Goldthwait), rams his van into Verrill's Mercedes Benz to prevent his escape. Verrill runs into the woods, while Kirschman takes the money from his car. Bernie chases Verrill, but he knocks her unconscious and tries to drown her in the lake. However, Bernie recovers and punches him. Kirschman arrives in time to arrest Verrill, then he and Bernie discuss business arrangements regarding future burglaries.