After waiting for a few hours for a man named Pyle to arrive at his apartment, Thomas Fowler decides to take a look around outside. He doesn't find Pyle, but he does run into Phuong, who's also anxious about Pyle's whereabouts. He invites her in to his place and tries to pass the time by probing her about her relationship with Pyle. Someone arrives—a Vietnamese police officer. He asks for them both to come to the French police station. At the station, an officer named Vigot interrogates Fowler about his knowledge of Pyle and his previous relationship with Phuong. Pyle, he learns, is dead. He tells Phuong the sad news after they return to his place. She spends the night.
The next day Fowler and Phuong go to get her belongings from Pyle's place. There they find Vigot. The officer allows them to gather her things. Fowler takes a book belonging to Pyle, a work by York Harding, a major influence on Pyle's thinking. Fowler believes that Pyle's innocent commitment to spreading Democracy "York Harding style" got him killed. That's what he tells himself and others. We sense he's holding back the whole truth.
The narration switches to the time Pyle and Phuong first met. Phuong and Fowler are at the Continental hotel bar having a drink. Pyle invites them over to his table with the economic attaché. Another reporter named Granger shows up drunk. After some awkward talk, they all decide to go elsewhere for fun. Fowler and Phuong go to a restaurant. Pyle goes with Granger to a naughty place called House of the Five Hundred Girls, but Fowler, sensing Pyle's innocence, fetches him and brings him to the restaurant with them.
Fowler decides it time to see the war up close and heads north. Unexpectedly, Pyle shows up there, apparently having come all the way and into danger just to tell Fowler than he plans to court Phuong. He wants to be respectful and fair, though, so he'll wait to make a move until Fowler returns to Saigon. Fowler, of course, is not pleased. To make matters worse, he returns "home" to discover that he's been promoted and is to return to England. He's still married, so he can't exactly take Phuong with him. Fortunately for Fowler, Phuong declines Pyle's marriage proposal and Fowler convinces his employer to let him stay.
Fowler next runs into Pyle at a Caodaist festival in Tanyin. Pyle seems to be up to something related to General Thé. Fowler and Pyle intend to return to Saigon separately, but Pyle's car isn't working, so Fowler kindly gives him a lift. On the way back, they run out of gas, most of it having been stolen. They take shelter in a watchtower but have to flee when it's attacked. In their escape, Fowler injures his leg and Pyle saves his life.
Phuong tends to Fowler when he returns. He tells her that his wife has written a response to him and might grant him the divorce. Phuong is pleased, but she'll soon learn that this is a lie and leave him for Pyle. Meanwhile, Fowler learns through a contact that Pyle is involved in some plot involving plastics. When, a little later, Fowler witnesses a minor bombing and discovers the evidence points to Pyle's involvement, Fowler begins to suspect that Pyle is involved with arming General Thé. His suspicions are confirmed when he and Pyle are both witnesses of a major bombing of a civilian area and Pyle admits that the attack should not have happened the way it did. Fowler had tried to warn Pyle against this sort of thing. Now, seeing that Pyle is shocked but unremorseful and undeterred, he decides he has to do something.
As Paul Harvey would say, now you know the rest of the story. Well, almost. Fowler plots with Mr. Heng, the man who gave him evidence of Pyle's suspicious behavior, to have Pyle dealt with. Fowler knows this means an assassination. The plan works. The police never discover the exact nature of his participation. Phuong returns to him and his wife finally agrees to a divorce. Fowler would be happy man if he were not now nagged by guilt.