In 1982, Norman Bates works at the Bates Motel and lives with the preserved corpse of his mother, Emma Spool. Local law enforcement and Norman's ex-boss, Ralph Statler, are concerned because Mrs. Spool has been missing for over a month. Duane Duke, a sleazy musician desperate for money, is offered the job of assistant motel manager to replace the late Warren Toomey who was fired by Norman. Tracy Venable, a journalist from Los Angeles, is working on an article about serial killers being released. She believes Norman is killing again, so when Norman appears at the diner, Tracy attempts to talk with him. Unaware of her ulterior motives, Norman opens up to her but is distracted when Maureen Coyle, a young, mentally unstable former nun, enters. He is startled because she resembles his former victim, Marion Crane. Seeing the initials "M.C." on her suitcase, Norman panics and leaves the diner.
"Mother" enters Maureen's bathroom later that night, intending to kill her, only to find that Maureen has attempted suicide by cutting her wrists. The shock of this causes Norman to reassert his personality while a delirious Maureen mistakes "Mother" holding a knife for the Virgin Mary holding a silver crucifix. Norman brings Maureen to a hospital and offers that she stay as long as she needs to. After she is released, they begin a romantic relationship. Later that night, Duane picks up a girl named Red at a bar, but after Red makes it clear that she wants more than just a fling, Duane throws her out. Red tries to call a cab, but "Mother" shatters the phone booth door and stabs Red to death. The following day, tourists arrive at the motel, where they plan to watch a local football game. Meanwhile, Tracy searches Mrs. Spool's apartment. She discovers the Bates Motel's phone number written on a magazine cover repeatedly.
Patsy Boyle, the only sober guest, is murdered by "Mother". Norman discovers Patsy's body and buries her in the motel's ice chest outside the office. The next morning, Sheriff Hunt and Deputy Leo appear to investigate Patsy's disappearance. Tracy tells Maureen about Norman's past, causing Maureen to stay with Father Brian, who took care of her at the hospital. Norman finds that his mother's corpse is missing and finds a note stating that she is in Cabin 12. Duane demands a large sum of money to keep quiet or else he will turn Norman over to the police. They fight and Norman beats Duane with his guitar until he loses consciousness. Norman drives Duane's car to the swamp with Duane and Patsy's bodies in it. Duane then regains consciousness and attacks Norman, who accidentally drives into the swamp. Norman escapes the car while Duane drowns. Meanwhile, Tracy talks to Statler and Myrna about Mrs. Spool and discovers she was working at the diner before Statler bought it from Harvey Leach. Tracy meets with Leach, a resident at an assisted living facility, and is informed that Mrs. Spool had also been institutionalized for murder.
Maureen convinces herself that Norman is her true love and returns to the motel. Norman and Maureen share a tender moment at the top of the staircase when "Mother" shouts furiously at Norman, startling him. He loses his grip on Maureen's hands, causing her to fall down the stairs, killing her. Enraged, Norman promises "Mother" that he will get her for this. Tracy enters the house and finds Maureen dead, then sees Norman dressed as "Mother" bearing a knife, but is unable to flee. She tries reasoning with Norman by explaining his family history: Emma Spool was his aunt and was in love with Norman's father, but he married her sister, Norma. Mrs. Spool kidnapped Norman when he was a baby, after killing Mr. Bates, believing Norman was the child "she should have had with him". When she was caught, Norman was returned to Norma while Mrs. Spool was institutionalized. Tracy discovers Mrs. Spool's corpse in the bedroom. Norman takes off his dress. "Mother" orders him to kill Tracy, but when Norman raises the knife, he attacks "Mother" instead, dismembering Mrs. Spool's corpse. Sheriff Hunt takes Norman to his squad car. Hunt informs Norman that they may never release him from the institution again. Norman replies: "But I'll be free...I'll finally be free." In the back of the squad car, Norman caresses a trophy he concealed: the severed hand of Mrs. Spool. He strokes the hand and smiles craftily.Anthony Perkins as Norman Bates
Diana Scarwid as Maureen Coyle
Jeff Fahey as Duane Duke
Roberta Maxwell as Tracey "Tracy" Venable
Hugh Gillin as Sheriff John Hunt
Robert Alan Browne as Ralph Statler
Lee Garlington as Myrna
Donovan Scott as Kyle
Karen Hensel as Sister Catherine
Jack Murdock as Lou
Katt Shea as Patsy Boyle
Juliette Cummins as Red
Donovan Scott as Kyle
Janet Leigh as Marion Crane (flashback)
Claudia Bryar as Emma Spool (flashback)
All tracks written by Carter Burwell, except where noted .
Carter Burwell was approached by Perkins to compose the score to the film, since Perkins had enjoyed Burwell's work on Blood Simple. Perkins stated that he wanted to take the score in a more contemporary direction than Jerry Goldsmith had for his more traditional score for Psycho II. Burwell flew to Los Angeles and recorded the score largely on a Synclavier electronic music station, augmented by women's and boys' choirs as well as percussion by Steve Forman.
After Universal suggested the film contain some pop songs so that the film could be marketable to the MTV generation, Burwell composed and performed songs with colleagues Stanton Miranda and Steve Bray. After Universal claimed the songs weren't sufficiently bankable, Burwell attempted to create a song with Oingo Boingo frontman and then burgeoning film composer Danny Elfman, using sampled strings from Bernard Herrmann's score to the original Psycho. This idea was also rejected.
Universal finally agreed to let Burwell take a motif from the score he'd composed and develop it into an instrumental electronic pop song. The song, "Scream of Love"--co-written by jazz saxophonist David Sanborn--was released as a 7" single and a series of dance remixes were commissioned from Arthur Baker and featured on the 12" version. MCA also commissioned a music video for the song featuring Burwell, Perkins and a "Hitchcockian woman." Perkins introduced the video on MTV as a guest VJ on July 2, 1986. The rest of the songs composed by Burwell, Miranda and Bray were used as background music in the film, playing from car stereos and jukeboxes.
When the film opened on July 2, 1986, it earned $3.2 million in its opening weekend and went on to gross about $14.5 million at the domestic box office, becoming the lowest grossing theatrical film of the Psycho movie series.
Psycho III has been released four times on DVD. The initial release came in 1999 when Universal Studios leased the film out to GoodTimes Home Video. This release is currently out of print. The second release came in 2005 from Universal Studios itself. The third release came in 2007 as part of a triple feature package with Psycho II and Psycho IV: The Beginning. On September 24, 2013, Shout Factory released a Special Edition on DVD and Blu-ray.