New York City, 1953. While performing pest control in an apartment, Bill Lee finds himself out of bug powder, which frustrates his boss, A.J. Cohen, who uses it sparingly. Later, at a nearby bar, Bill connects with two fellow writers who engage in a spirited debate on writing techniques. Martin endlessly rewrites, while Hank firmly opposes self-censorship. Bill expresses his view: "Exterminate all rational thought," claiming he has stopped writing because it has become "too dangerous." Upon returning home, he discovers his wife, Joan, using the powder herself. She urges him to do the same, saying: > "It's a Kafka high... you feel like a bug."
Things take a turn for the worse when Bill is arrested for possessing illegal drugs. At the police station, he finds himself alone in an interrogation room with an enormous beetle that consumes bug powder and claims to be his "case officer." The insect informs Bill that his latest mission is to eliminate his wife, whom it reveals to be an inhuman agent working for Interzone Incorporated. In a fit of rage, Bill squashes the beetle beneath his shoe and makes a daring escape.
He confronts Joan and shares the bizarre events of his arrest and subsequent hallucinations. A colleague introduces him to Dr. Benway, a dubious figure who can supposedly help him overcome his addiction. At Dr. Benway's, he is given mysterious black centipede powder and warned that it represents an agent who has lost touch with reality, lying dormant until the right moment to awaken. Overwhelmed, Bill feels sick when he encounters a stall selling giant centipedes. Upon arriving home, he witnesses his friend Hank engaged in an intimate encounter with Joan, while Martin recites nonsensical prose. In a tragic twist, Bill injects both himself and Joan with drugs before attempting a William Tell routine, resulting in her tragic demise.
Bill later meets an unusual Asian man in a bar who introduces him to a mugwump—an eerie, bizarre alien creature. This creature recommends a Clark-Nova typewriter to help him document his wife's death for Interzone, giving him a ticket to the strange locale. After pawning his gun for the typewriter, Bill finds himself in Interzone, a surreal North African enclave where he and others are ordered to type obscure reports. He encounters a flamboyant German named Hans, who is engaged in synthesizing a drug known as black centipede "meat."
Bill's drug-induced haze manifests as his Clark-Nova begins to morph into a beetle, which claims that homosexual relationships are the best cover for agents. At a party, he meets Tom and Joan Frost, a woman who bears a startling resemblance to his deceased wife. Tom reveals to Bill that he is killing his wife slowly through manipulative telepathy. Disturbed, Bill collapses on the beach, only to be rescued by the enigmatic Cloquet, who has an interest in Bill’s writing. After a series of absurd encounters and further chaos involving his typewriters and relationships, Bill learns that he was manipulated into becoming an unwitting assassin.
Eventually, when discovering Hans’ drug factory, Bill uncovers the appalling process of how addicts are exploited for their addiction. He must navigate a web of deception, runaway desires, and surreal hazards, including a confrontation with the disguised Fadela who is revealed to be Dr. Benway in disguise. Bill strikes a deal to work for Benway, with the condition that Joan can accompany him. However, as they approach the border into Annexia, it culminates in another horrifying scene where Bill, repeating the William Tell routine, is left devastated after again shooting Joan, only to be welcomed by the border guards with indifference rather than the judgment he expected.
