The film marks the second time Davis played twin sisters, the first being in the 1946 film A Stolen Life. For this reason, Dead Ringer is sometimes mistakenly listed as a remake of A Stolen Life.
At the funeral of her husband Frank, wealthy widow Margaret DeLorca (Bette Davis), meets up with her identical twin sister, dowdy and downbeat Edith Phillips (also played by Davis), from whom she has been estranged for 18 years. The two return to DeLorca's opulent mansion, where they argue about their falling out over Margaret's marriage to DeLorca, who originally courted Edith but had an affair with Margaret. Margaret had forced Frank to marry her by telling him she was pregnant with his child. However, Edith finds out from Margaret's chauffeur (George Chandler) that the couple were childless, and becomes resentful, realising how Margaret had trapped Frank into marriage. While Margaret now enjoys a life of ease and wealth, Edith is struggling financially; her business, a cocktail lounge, is losing money and she is threatened with eviction for not paying her bills.
Later the same day, which is also the sisters' birthday, Edith rings Margaret and orders her to come over. Earlier in the evening, Edith had seen her boyfriend, police sergeant Jim Hobson (Karl Malden), when he gave her a wrist watch as a birthday present, but was hurt and puzzled because she didn't want to spend the evening with him. She had hurried him away in order to make preparations before Margaret's arrival, particularly altering her hairdo to the bob and bangs style Margaret has. When Margaret arrives, she admits there never really was a pregnancy, and Edith shoots her in the head. Jim, feeling uneasy, comes back just after the murder but hears what he assumes is the two sisters singing and joking together, and doesn't go up the stairs to check. What he has actually heard is Edith, aware of Jim's presence, pretending to talk to her sister as she exchanges their clothes and jewellery and sets the corpse up to look like a suicide. She has a pang of regret at having to take off the watch Jim gave her in order to put it on Margaret's wrist – not only is she having to part with his gift, but it signifies that her old life and everything in it, including Jim, is finished. She then returns to the DeLorca mansion and assumes Margaret's identity, but while superficially she appears to look, talk and act like Margaret, the staff notice differences, such as the house's Great Dane hating Margaret but taking to Edith immediately, and the fact that Edith, unlike Margaret, is a smoker. The maid (Paul Henreid's daughter Monika in a small role) is puzzled when her mistress chooses not to put her very valuable jewelry in the safe, not realizing of course that Edith has no idea what the combination is. Eventually, because of her failure to imitate her sister's signature, required for papers pertaining to Frank's estate, Edith is forced to purposely burn her hand on a poker she has heated in the fire, in order to have a plausible excuse not to sign her name with her right hand.
Meanwhile, Jim visits "Margaret" several times, asking questions about the death of Edith, whom he loved. Edith is troubled about having to lie to Jim, who keeps commenting on the remarkable likeness between the sisters. She tries to offer him the wrist watch as a keepsake, a gesture Jim recoils from; it feels to him that "Margaret" is unaware of the significance of the watch, and it painfully reminds him of the birthday evening which was the last time, as far as he is concerned, that he ever saw Edith alive.
Edith's scheme runs into unforeseen trouble when she discovers that Margaret had had a lover, Tony (Peter Lawford), a louche would-be playboy who unexpectedly turns up and very quickly sees through her charade. Tony blackmails Edith over the killing of Margaret, and receives very expensive jewelry as payment. Edith then learns that Margaret and Tony had conspired to murder Frank by poisoning him with arsenic. Tony and Edith quarrel; when he threatens her, Margaret's Great Dane attacks and kills him.
Jim has become suspicious about DeLorca's death and leads an investigation in which the police eventually exhume Frank's body and find traces of arsenic. When Jim arrives to arrest her, Edith confesses her true identity. Jim is repulsed and does not believe her, telling her "Edie would never hurt a fly." Henry, the faithful butler, is revealed to have known what was happening all along when he quietly asks what she would have him say at trial; she is touched and grateful that she has had a friend all through the deception, who even now is prepared to stand by her.
Edith, as Margaret, is tried, found guilty of murder, and sentenced to death. Aware that she has indeed committed murder, although not the one she is being accused of, Edith submits to justice. As she is taken away from the courthouse, a troubled Jim approaches her and asks if she really is Edith. Because she loves him and wants to spare him any more doubt, or grief over losing her a second time, she enigmatically reminds him that "Edith would never hurt a fly", and departs.