James Bond—agent 007—pursues Ernst Stavro Blofeld and eventually finds him at a facility where Blofeld look-alikes are being created through surgery. Bond kills a test subject, and later the "real" Blofeld, by drowning him in a pool of superheated mud.
While assassins Mr. Wint and Mr. Kidd systematically kill several diamond smugglers, M suspects that South African diamonds are being stockpiled to depress prices by dumping, and orders Bond to uncover the smuggling ring. Disguised as professional smuggler and assassin Peter Franks, Bond travels to Amsterdam to meet contact Tiffany Case. The real Franks shows up on the way, but Bond intercepts and kills him, then switches IDs to make it seem like Franks is Bond. Case and Bond then go to Los Angeles, smuggling the diamonds inside Franks' corpse.
At the airport Bond meets his CIA ally Felix Leiter, then travels to Las Vegas. At a funeral home, Franks' body is cremated and the diamonds are passed on to another smuggler, Shady Tree. Bond is nearly killed by Wint and Kidd when they put him in a cremation oven, but Tree stops the process when he discovers that the diamonds in Franks' body were fakes, planted by Bond and the CIA.
Bond tells Leiter to ship the real diamonds. Bond then goes to the Whyte House, a casino-hotel owned by the reclusive billionaire Willard Whyte in Las Vegas, where Tree works as a stand-up comedian. Bond discovers there that Tree has been killed by Wint and Kidd, who did not know that the diamonds were fake.
At the craps table Bond meets the opportunistic Plenty O'Toole, and after gambling, brings her to his room. Gang members ambush them, throwing O'Toole out the window and into the pool. Bond spends the rest of the night with Tiffany Case, instructing her to retrieve the diamonds at the Circus Circus casino.
Tiffany reneges on her deal and flees, passing off the diamonds to the next smuggler. However, seeing that O'Toole was killed after being mistaken for her, Tiffany changes her mind. She drives Bond to the airport, where the diamonds are given to Bert Saxby, who is followed to a remote facility. Bond enters the apparent destination of the diamonds — a research laboratory owned by Whyte, where a satellite is being built by Professor Metz, a laser refraction specialist. When Bond's cover is blown, he escapes by stealing a moon buggy and reunites with Tiffany.
Bond scales the walls to the Whyte House's top floor to confront Whyte. He is instead met by two identical Blofelds, who use an electronic device to sound like Whyte. Bond kills one of the Blofelds, which turns out to be a look-alike. He is then knocked out by gas, picked up by Wint and Kidd and taken out to Las Vegas Valley, where he is placed in a pipeline and left to die.
Bond escapes, then calls Blofeld, using a similar electronic device to pose as Saxby. He finds out Whyte's location and rescues him. In the meantime, Blofeld abducts Case. With the help of Whyte, Bond raids the lab and uncovers Blofeld's plot to create a laser satellite using the diamonds, which by now has already been sent into orbit. With the satellite, Blofeld destroys nuclear weapons in China, the Soviet Union and the United States, then proposes an international auction for global nuclear supremacy.
Whyte identifies an oil platform off the coast of Baja California as Blofeld's base of operations. After Bond's attempt to change the cassette containing the satellite control codes fails due to a mistake by Tiffany, Leiter and the CIA begin a helicopter attack on the oil rig.
Blofeld tries to escape on a midget submarine. Bond gains control of the submarine's launch crane and crashes the submarine into the control room, causing both the satellite control and the base to be destroyed. Bond and Tiffany then head for Britain on a cruise ship, where Wint and Kidd pose as room-service stewards and attempt to kill them with a hidden bomb. Bond kills them instead.