In 1941, up-and-coming Broadway playwright Barton Fink (Turturro) accepts a contract from Capitol Pictures in Hollywood to write film scripts for a thousand dollars per week. Upon moving to Los Angeles, Fink settles into the cheap Hotel Earle. His room’s only decoration is a small painting of a woman on the beach, arm raised to block the sun. Fink is assigned to a wrestling film by his new boss Jack Lipnick (Lerner), but he finds difficulty in writing for the unfamiliar subject. He is distracted by sounds coming from the room next door, and he phones the front desk to complain. His neighbor, Charlie Meadows (Goodman), is the source of the noise and visits Fink to apologize. As they talk, Fink proclaims his affection for “the common man”, and Meadows describes his life as an insurance salesman.
Still unable to proceed beyond the first lines of his script, Fink consults producer Ben Geisler (Shalhoub) for advice. Irritated, the frenetic Geisler takes him to lunch and orders him to consult another writer for assistance. Fink accidentally meets the novelist W.P. (Bill) Mayhew (Mahoney) in the bathroom. They briefly discuss movie-writing and arrange a second meeting later in the day. Fink later learns from Mayhew’s secretary, Audrey Taylor (Davis), that Mayhew suffers from alcoholism and that Taylor ghostwrote most of his scripts. With one day left before his meeting with Lipnick to discuss the movie, Fink phones Taylor and begs her for assistance. Taylor visits him at the Earle and they have sex. Fink awakens the next morning to find that Taylor had been violently murdered. Horrified, he summons Meadows and asks for help. Meadows is repulsed but disposes of the body and orders Fink to avoid contacting the police.
After Fink has a meeting with an unusually supportive Lipnick, Meadows announces to Fink that he is going to New York for several days, and asks him to watch over a package he is leaving behind. Soon afterward, Fink is visited by two police detectives, who inform him that Meadows’s real name is Karl “Madman” Mundt. Mundt is a serial killer whose modus operandi is beheading his victims. Stunned, Fink places the box on his desk without opening it and he begins writing feverishly. Fink produces the entire script in one sitting and he goes out for a night of celebratory dancing. Fink returns to find the detectives in his room, who inform him of Mayhew’s murder and accuse Fink of complicity with Mundt. As the hotel is suddenly engulfed in flames, Mundt appears and kills the detectives with a shotgun, after which he mentions that he had paid a visit to Fink’s parents and uncle in New York. Fink leaves the still-burning hotel, carrying the box and his script. Shortly thereafter he attempts to telephone his family, but there is no answer. In a final meeting with Lipnick, Fink’s script is lambasted as “a fruity movie about suffering”, and he is informed that he is to remain in Los Angeles; although Fink will remain under contract, Capitol Pictures will not produce anything he writes until he “grows up a little”. Dazed, Fink wanders onto a beach, still carrying the package. He meets a woman who looks just like the one in the picture on his wall at the Earle, and she asks about the box. He tells her he does not know what it contains nor who owns it. She then assumes the pose from the picture.