Los Angeles Times reporter Irwin "Fletch" Fletcher is on a mission to expose drug trafficking along the beach, where he suspects that food vendor Fat Sam is involved in distributing heroin from his shack. Posing as a homeless drug addict for his investigation, Fletch is unexpectedly approached by Alan Stanwyk, who mistakenly believes him to be a junkie. Offering Fletch $1,000 just to discuss a peculiar proposal, Alan invites him to his opulent mansion in Beverly Hills, revealing himself as the executive vice president of Boyd Aviation.
Under a troubling pretext, Stanwyk claims he has terminal bone cancer and only months to live, expressing a wish to avoid further agony. He then offers Fletch $50,000 to come back and murder him, staging it as a burglary to facilitate his escape to Rio de Janeiro. Despite his suspicions, Fletch pretends to agree to the unsettling plan. Partnering with his colleague Louisa Larry, Fletch begins to delve deeper into Stanwyk’s life rather than pursuing the drug trafficking story, much to the frustration of his demanding boss, Frank Walker.
The following day brings a rather uncomfortable situation: Fletch endures a rectal exam from Stanwyk's doctor, Dr. Dolan, desperately trying to extract information about Stanwyk's health. Later, he manages to sneak into the hospital’s records room under the guise of a doctor, only to discover that Stanwyk has been lying about his cancer diagnosis. In an attempt to gather more intel, Fletch pays a visit to Stanwyk's wife Gail at her tennis club, where, pretending to be an acquaintance of her husband, he flirts with her during a spur-of-the-moment tennis lesson, though he doesn't learn much and eventually leaves.
Undeterred, Fletch masquerades as an FCC agent to probe Stanton Boyd, Gail’s father and head of Boyd Aviation, digging into Stanwyk's finances. To his surprise, he uncovers that Gail recently liquidated $3 million of her Boyd Aviation stocks for her husband, sparking further intrigue. After returning to his apartment, he finds himself confronted by Marvin Gillet, his ex-wife's lawyer, who is there to collect overdue alimony. Fletch cleverly bribes him with the $1,000 cash that Stanwyk had given him.
As Fletch settles down with a cold beer and drifts off to sleep, he dreams of playing for the Lakers, scoring hoops. The next day, while on an undercover operation at the beach, he witnesses one of Fat Sam's customers, Gummy, attempting to flee from a patrol car. Despite his efforts to intervene, Fletch gets kicked in the groin by the police and is powerless to stop them from whisking Gummy away. Reacting in frustration, he hurls a rock at the police car, but it merely continues down the road.
Days later, Fletch finds himself in Provo, breaking into a realtor's office and uncovering the property deed that shows a suspiciously low selling price of $3,000. His escape from the premises is narrowly secured, chased by a guard dog. Back in Los Angeles, LAPD Chief Jerry Karlin becomes aware of Fletch’s drug article set to be published and sends two brutal detectives to arrest him, planting heroin in his apartment. During their confrontation, Karlin threatens Fletch with dire consequences, but Fletch retorts that he’ll be focusing on another story about off-track betting in the Himalayas. Amused, Karlin releases him, but the ordeal ignites Fletch's determination to uncover the truth behind the drug-dealing scene.
Dressing as a redneck airplane mechanic, Fletch gains entry into Stanwyk's hangar, where he learns Stanwyk has been making questionable trips to Utah under the guise of business. A rendezvous at the tennis club with Gail leads to an expensive lunch charged to the obnoxious Ted Underhill, adding more humor to the unfolding drama. Fletch watches from a distance as Stanwyk engages in a cryptic exchange with Chief Karlin, raising more questions about their relationship. When two squad cars show up at his apartment, Fletch narrowly escapes after a thrilling car chase using an Alfa Romeo he "borrows" from a young thief, temporarily throwing off his pursuers at a lodge dinner.
Returning to Provo, Fletch, disguised as an insurance investigator, interviews Stanwyk's parents and finds evidence of Stanwyk’s secret marriage to another woman, revealing the truth behind his motivations. Back in Beverly Hills, he shares his findings with Gail, who is understandably upset. On the night of the planned murder, when Fletch arrives at Stanwyk’s mansion, he discovers that the tables have turned: Stanwyk intends to kill him instead, adopting a sinister plan to fake his death.
Realization dawns on Fletch as Stanwyk reveals his intent to burn Fletch's body, taking off to Brazil with both his other wife and Gail’s $3 million. Just then, Chief Karlin appears, and upon discovering Stanwyk's intent to escape with Karlin's drug money, he kills Stanwyk. In a twist of fate, Karlin turns his weapon on Fletch, only to be knocked out cold by Gail with a tennis racket.
In the aftermath, Karlin is indicted for Stanwyk’s murder, thanks to Fletch’s investigative work. As Fletch starts a new chapter, he begins dating Gail, taking her on a much-deserved vacation to Rio. In a final comedic touch, Fletch shares with the audience that he had charged the trip to Underhill's credit account, leaving them in stitches as the screen fades to black.
