Chili Palmer, a Miami-based loan shark, gets sent to Los Angeles to collect a debt from a down-and-out film producer named Harry Zimm. While in LA, Chili becomes enamored with the movie business and sees it as his chance to break into Hollywood. He pitches a script idea to Harry and strikes up a relationship with actress Karen Flores, who introduces him to the movie world. Simultaneously, Chili uses his streetwise tactics to deal with various unsavory characters, including rival gangster Bo Catlett, who is also interested in Harry's movie project.

As Chili delves deeper into Hollywood, he attempts to secure financing for the film by leveraging his criminal connections. He navigates through a web of deceit and betrayal while maintaining his cool demeanor. Balancing his old life with his new ambitions, Chili proves adept at handling the quirks and egos of the film industry. The story develops as he tries to pull off his plans, manage the chaos surrounding him, and achieve his dream without compromising himself or the project.