The film tells, in flashback, the story of Suresh Sinha (Guru Dutt), a famous film director. His marriage to Bina (Veena) is on the rocks because her wealthy family sees filmmaking as a job lacking in social status. He is also denied access to his daughter Pammi (Naaz) who is sent to a private boarding school.
On a rainy night Sinha meets a woman Shanti (Waheeda Rehman) and gives her his coat. She comes to the film studio to return the coat, unintentionally disrupting the shooting by walking in front of the camera. While reviewing the rushes, Sinha recognises her potential as a star in the making and casts her as Paro in Devdas. Shanti goes on to become an acclaimed star. Shanti and Suresh, two lonely people, come together. Their liaison is hotly debated in gossip columns and results in Pammi's friends tormenting her in school. Pammi pleads with Shanti to leave Sinha's life and allow her parent’s marriage another chance. Moved by Pammi’s plea Shanti throws away her career and becomes a school teacher in a small village. Shanti’s departure drives Suresh to alcohol, a downhill slide in his career and consequent decline in his fortunes. Shanti is forced to return to films since she has a contract with the studio. Eventually he gets a chance to make a comeback film only if it stars Shanti; but by then she is unable to help him, as he is too far-gone for redemption. In the final scene, Sinha, remembering his glorious past, dies in the empty film studio in the director's chair, a lonely and forgotten man.