The discovery of a severed human ear found in a field leads a young man on an investigation related to a beautiful, mysterious nightclub singer and a group of criminals who have kidnapped her child.
Jeffrey Beaumont (Kyle MacLachlan) returns to his logging home town of Lumberton, North Carolina, from Oak Lake College after his father suffers a near-fatal stroke. While walking home from the hospital, he cuts through a vacant lot and discovers a severed ear. Jeffrey takes the ear to police detective John Williams (George Dickerson) and becomes reacquainted with the detective’s daughter, Sandy (Laura Dern). She tells him details about the ear case and a suspicious woman, Dorothy Vallens (Isabella Rossellini), who may be connected to the case. Increasingly curious, Jeffrey enters Dorothy’s apartment by posing as an exterminator, and while Dorothy is distracted by a man dressed in a yellow suit at her door (whom Jeffrey later refers to as the Yellow Man), Jeffrey steals her spare key.
Jeffrey and Sandy attend Dorothy’s nightclub act, in which she sings “Blue Velvet,” and leave early so Jeffrey can sneak into her apartment to snoop. He hurriedly hides in a closet when she returns home. However, Dorothy, wielding a knife, discovers him and threatens to kill him. Believing his curiosity is merely sexual and aroused by his voyeurism, Dorothy makes Jeffrey undress at knife-point and begins to fellate him before their encounter is interrupted by a knock at the door. Dorothy hides Jeffrey in the closet. From there he witnesses the visitor, Frank Booth (Dennis Hopper), inflict his bizarre sexual proclivities—which include inhaling an unidentified gas, dry humping, and sadomasochism—upon Dorothy. Frank is an extremely foul-mouthed, violent man whose orgasmic climax is a fit of both pleasure and rage. He continually refers to her as “Mommy” and to himself as both the “Daddy” and the “Baby,” who “wants to fuck.” Frank has kidnapped Dorothy’s husband and son to force her to perform sexual favors; to “Do it for van Gogh.” When Frank leaves, a sad and desperate Dorothy tries to seduce Jeffrey again and demands that he hit her, but when he refuses, she tells him to leave. When Jeffrey moves to leave, she asks him to stay, though he leaves anyway…