After World War II, Steve Monahan returns to New York and lands a job as a physicist with Benson Research Laboratories on Long Island, which is attempting to create atomic energy without uranium. Steve meets former college classmate John Bates, who had once recruited him to the Communist Youth League. Bates now wants Steve to supply him with research information, which would, he claims, make the atomic bomb universal property and thereby prevent another war. Steve is very reluctant to resume Party activities, so Bates threatens to expose him as a Communist, knowing it would cost him his job. Steve lets Bates think that he is cooperating, then risks going to see Special Agent Henderson to confess his early Communist Party membership. Henderson puts him at ease, explaining that they already know his record and that many students like him became "dupes" of what started as a liberal, democratic group then turned out to be subversive. Henderson then asks Steve to help him to find the local Party leader--a man known only as Michael Radik--who is working out of a fashionable New York nightclub, The Paradise. The only clue Henderson has is a photograph taken from behind Radik, which shows him holding a cigarette as if it were a pencil. At the club, Steve meets entertainer Sandra Russell and begins to fall in love with her, hoping that she is not involved with the Party. Later, Special Agents Martin and Fraser, who are working in the club, are discovered and disappear. Although Steve cannot identify Radik, Sandra is now suspected of being in the ring. Steve begins to think that she may be Radik when he discovers Fraser dead in her apartment. However, after Henderson raids the club, he confirms that Sandra is innocent. Later, Steve notices Gigi, one of the cigarette girls who works in the club, holding her cigarette like a pencil and pulls at her hair, removing a wig. Exposed, Radik draws a gun, knocks Steve out and forces Sandra to walk out of the club with him. After Steve recovers, he calls the police and they pursue the car in which Radik has fled with Sandra. Radik is finally cornered in Brooklyn, and dies in a gutter after a gun battle. Steve rushes to Sandra and they look down at Radik, whose disguise is slowly washing away in the gutter.