Down-on-his-luck pulp novelist Holly Martins (Joseph Cotten) travels to Vienna on the promise of a job from his old friend Harry Lime (Orson Welles). His arrival in the divided city is badly timed — Lime is knocked down in the street outside his apartment and killed 10 minutes before Martins gets there. At Lime’s funeral, Martins meets Major Calloway (Trevor Howard), a British military policeman who has been investigating his late friend’s black market activities, and Baron Kurtz (Ernst Deutsch), a sinister acquaintance of Lime’s who claims he helped move his body with another man after the fatal accident.
Martins can’t bring himself to believe Calloway’s accusations and decides to carry out his own investigation into Lime’s death. That leads him to the latter’s devoted lover Anna (Alida Valli), and conflicting testimony that places a mysterious third man at the scene of the accident.
Annoyed by Martins poking his nose in, Calloway reveals that Lime was selling diluted stolen penicillin on the black market, causing the death of many sick children. Dispirited and lovelorn after Anna rejects his awkward advances, Martins resigns himself to heading home to the U.S. But then he spots a figure lurking in a darkened doorway near Anna’s apartment building — it is Harry Lime. How could that be?
After Lime vanishes, Martins reports the sighting to Calloway, who orders the exhumation of Lime’s body. The coffin contains the remains of an orderly who helped Lime steal penicillin from a military hospital. Deciding it is time to confront his old friend, Martins agrees to see him at Vienna’s Prater amusement park in broad daylight, where they take a nice little ride on the city’s famous Riesenrad Ferris wheel together.