Time magazine included the novel in its TIME 100 Best English-language Novels from 1923 to 2005.
The title is a euphemism for death; it refers to a rumination in the book about "sleeping the big sleep", and is not descriptive of the plot.
Private investigator Philip Marlowe is called to the sprawling mansion of the elderly and infirm (paraplegic) General Sternwood. He asks Marlowe to deal with a blackmailer named Arthur Gwynn Geiger, apparently a purveyor of rare books. Geiger is involved with the General's nymphomaniac daughter Carmen, and makes her sign promissory notes. Marlowe tells the general that he will persuade Geiger to stop. Before Marlowe leaves, Vivian, the General's other daughter, queries Marlowe about the nature of his visit. She is under the impression that he is looking for her ex-husband, Terence "Rusty" Regan, who had disappeared about a month ago.
Marlowe visits Geiger's bookshop, where he discovers that the assistant, Agnes, knows absolutely nothing about rare books. While he is waiting to talk with Geiger, a customer visits the back room of the store and leaves with a book. After following him and taking the book, Marlowe deduces that Geiger loans pornography, and then blackmails his customers. Marlowe goes back to the store to see Geiger leaving, and follows him to his house, where he waits outside. After some time, he hears gunshots and a woman's scream. He breaks his way into the house and finds Geiger dead on the floor in front of a camera. Carmen is posing naked and drugged with "ether and something else, possibly laudanum". He takes Carmen home, but doesn't call the police. When he returns to the scene, he discovers that the body has been removed.
The next morning he is telephoned by Bernie Ohls, a policeman, who informs him that the Sternwoods' chauffeur, Owen Taylor, has been found dead in the harbor. He apparently drove off the pier and drowned, but the doctor suspects the cause of death could be a blow to the back of the head. Marlowe visits the bookstore again, and finds that the porn books are being relocated to the premises of Joe Brody, a friend of Agnes. Brody is trying to take over Geiger's business, including the blackmail. Marlowe goes to his office, and finds Vivian waiting for him. She informs him that an anonymous woman is trying to extort her for the nude photos of Carmen. Visiting the crime scene a third time, Marlowe finds Carmen (who has forgotten the events of the previous evening) looking for the pictures. They are interrupted by Eddie Mars, a gangster who runs a local casino. He claims to be Geiger's landlord, looking for the rent.
Marlowe visits Joe Brody, who he believes has the compromising photos of Carmen. Brody admits to seeing Owen Taylor drive off the pier, but denies being the murderer. Marlowe eventually persuades Brody to give the photos to him, but Carmen arrives with a gun, extremely agitated. She shoots at Brody but only grazes his shoulder. Marlowe tells her to go home to her sister. Another caller knocks at the door and asks for Brody. Brody goes to the door but is shot dead before he can open it. Marlowe runs after the caller, captures him, and recognizes him as the other assistant from Geiger's store. The man identifies himself as Carol Lundgren, Geiger's homosexual lover. Carol shot Brody as he believed Brody killed Geiger to gain control of his racket. He had moved Geiger's body to another room and laid it out with black candles. Marlowe drives to the district attorney's house and hands Lundgren over to Bernie Ohls.
Marlowe visits the missing persons bureau and discovers that Regan apparently ran away with Mona Mars, Eddie Mars's wife. Eddie Mars calls Marlowe to his club, where Mars tries to bribe him to stop following the case. He sees Vivian winning a large amount of money in roulette. Marlowe later realizes that the win is an act to make him believe that Mars is not involved with Vivian. He also deduces that Mars knows something that could be very damaging to the Sternwoods, and is blackmailing her. When he finally goes home, he finds Carmen in his bed, nude. He throws her out in a rage.
Marlowe is being tailed by a man named Harry Jones, who wants to sell some information about Mona Mars to him. Marlowe agrees, and is told that she is being held at a secret location by Eddie Mars's hitman, Canino. He also learns that she never ran off with Regan, and is in hiding so that people will not think Mars killed Regan. Jones asks Marlowe to meet him at his office that night with two hundred dollars. Marlowe agrees, but upon arrival hears Canino talking to Jones through a doorway. Canino makes Jones tell him where Agnes, who has the information, is staying. Jones lies to him and Canino suggests they have a drink to celebrate Jones's common sense. Canino poisons the drink with cyanide which kills Harry. Marlowe phones Agnes, who has been involved with three men, all of whom are dead. She gives him Mona's location.
On the way to the safe house, Marlowe's car has a flat tire, so he visits a nearby mechanic. The mechanic is in the pay of Eddie Mars. Canino knocks Marlowe unconscious and brings him to the house where Mona is staying. When he wakes, he sees her, and she frees him after he says the famous line:
"You know what Canino will do? Beat my teeth out and kick me in the stomach for mumbling."
Canino comes back and a gunfight ensues. Canino is killed and Marlowe goes to the police, who do not press charges. Marlowe visits General Sternwood the next day, who is initially upset that Marlowe tried to find Rusty Regan, which he had not been asked to do. On the way out, Carmen asks Marlowe to teach her how to shoot. Carmen leads Marlowe to an abandoned oil field owned by the Sternwoods. He gives her gun back to her and sets up a can on a tire for target practice. As he walks back to her, Carmen tries to shoot him and then has an epileptic fit. Marlowe had loaded the gun with blanks. Marlowe visits Vivian and tells her the real story about Regan. Marlowe figures that Regan had thrown Carmen out of his bed, just like Marlowe, causing Carmen to hate him. She asked him to teach her how to shoot, and she shot him dead. Vivian admits that Carmen shot Regan and Vivian asked Eddie Mars to cover it up, but then he blackmailed her. Marlowe promises not to go the police as long as Carmen is institutionalized. The book ends with Marlowe ruminating on his adventures and the grim, sordid human comedy he has been thrust into.