In Baghdad, British intelligence operative Mr. Dakin, who poses as a dull oil company employee, learns that a secret international conference between heads of state will be held in the city. Dakin's agent, Henry Carmichael, has traveled to a remote region near China and the Himalayas and uncovered evidence of a vast conspiracy: A shadowy third force, neither Communist nor Capitalist, is deliberately stoking tensions between the superpowers to provoke global war, after which a self-appointed elite of young scientists and engineers intends to seize control. Carmichael has obtained proof on microfilm, but enemy operatives are hunting him, and Dakin suspects leaks within his own organization. Sir Rupert Crofton Lee, a famous explorer, has agreed to come to Baghdad for the Conference.
In New York, Anna Scheele, the confidential secretary to international banker Otto Morganthal, requests leave to visit her sister in London. Upon arriving, she discovers agents surveilling her and searching her hotel room. After visiting her sister at a nursing home, Scheele vanishes by disguising herself as a nurse, and the surveillance team loses her trail.
In London, Victoria Jones, a spirited young typist with a talent for lying, is fired from her secretarial job. She meets a charming young man named Edward, a former Royal Air Force pilot now working as personal assistant to Dr. Rathbone, who runs a cultural organization called the Olive Branch. Edward confides that he finds something suspicious about the operation and reveals he is leaving for Baghdad the next day. Victoria, instantly infatuated, resolves to follow him. An employment agency connects her with Mrs. Hamilton Clipp, an American woman who needs a traveling companion to Baghdad. Victoria forges references, claims her uncle is Dr. Pauncefoot Jones, a real archaeologist excavating in Iraq, and secures the position.
On the flight, Victoria observes Sir Rupert Crofton Lee. During a Cairo stopover, she notices a boil forming on the back of his neck and watches an air hostess escort him to a supposed airline office. In Baghdad, Sir Rupert receives a cryptic message and independently moves to the Tio Hotel. Dakin meets Sir Rupert there to coordinate Carmichael's reception. That night, a figure climbs up from the Tigris River on a knotted rope.
Later that night, a man bursts into Victoria's room begging her to hide him. She conceals him under the bedclothes and deflects a police search. When she uncovers him, she finds him dying from a stab wound, clutching a ragged red knitted scarf. He whispers three words: "Lucifer," "Basrah," and what sounds like "Lefarge." Victoria hurriedly stuffs the scarf into a drawer. Dakin enters, reveals the dead man is Carmichael, and orchestrates the quiet removal of the body. He recruits Victoria as an operative, sends her to Basrah to investigate Carmichael's dying words, and tells her to listen for the name Anna Scheele.
In Basrah, Victoria reunites with Edward, whose surname she learns is Goring. Edward recalls that Catherine, a Syrian colleague at the Olive Branch, once said they would take orders from Anna Scheele alone. News then reports that Sir Rupert Crofton Lee's body has been found in the Nile, stabbed through the heart.
Back in Baghdad, Victoria takes a typing job at the Olive Branch. On a day trip to Babylon, she realizes what seemed wrong about Sir Rupert at the Tio: On the plane he had a boil on his neck, but at the hotel the next morning his neck was smooth. The man at the Tio was an impersonator substituted in Cairo who met Carmichael under false pretenses and stabbed him.
Following Edward's advice, Victoria befriends Catherine, who lures her to an Armenian hairdresser where Victoria is chloroformed. She awakens days later in an unknown village, drugged and guarded. She escapes in the night and walks through the desert until found at dawn by Richard Baker, an archaeologist heading to Dr. Pauncefoot Jones's excavation. Victoria impulsively claims to be Pauncefoot Jones's niece, and the absentminded archaeologist mistakes her for Venetia, a Cambridge anthropologist expected shortly. With her hair inexplicably dyed platinum blonde, Victoria spends about a week at the dig.
Richard, who previously encountered Carmichael at the Basrah Consulate and received a mysterious document Carmichael slipped into his pocket, eventually confronts Victoria about her false identity. She confesses and shares the full story. While reading
A Tale of Two Cities, Victoria makes a crucial connection: Carmichael did not say "Lefarge" but "Defarge," as in Madame Defarge, the Dickens character who encoded names in her knitting. The red scarf Carmichael clutched when he died, which Victoria later packed into her suitcase, likely contains a coded message. The scarf remains among her belongings at the Tio Hotel.
Victoria rushes to Baghdad and tells Dakin about the scarf. He calls it the first real break they have had. But when she and Edward reunite, Victoria asks how he knew about the Bishop of Llangow, a detail from her forged references. Edward cannot explain without revealing he learned it from the Hamilton Clipps before Victoria left England, meaning their meeting was staged. Victoria understands: Edward is "Lucifer," the true leader of the conspiracy, using Rathbone as a figurehead.
Concealing her discovery, Victoria plays along as Edward reveals the plan. She was brought to Baghdad because she closely resembles Anna Scheele, including a matching scar on the upper lip. Edward intends for Victoria to impersonate Scheele at the Conference, presenting forged documents that fabricate a large-scale Communist plot. Recognizing that refusal means death, Victoria agrees while privately planning to expose the fraud. Edward disguises her as a nun and sends her to Damascus, where a decoy agent traveling under Scheele's alias is drugged and replaced by Victoria. Victoria flies to Baghdad as the false Scheele.
The conspiracy's true plan then becomes clear: Victoria was never meant to speak. She is to be killed and disfigured so that only the forged documents remain, attributed to the dead "Anna Scheele." An assassin enters her hotel room, but Dakin's operatives crash through the window and save her life.
Richard delivers Carmichael's document to Dakin. The real Anna Scheele then reveals herself: She has been traveling disguised as Mrs. Pauncefoot Jones, having dyed her hair black and used her sister's passport. At the Conference, attended by the President of the United States and the Soviet Premier, Anna provides financial testimony exposing the conspiracy's funding networks. Sheikh Hussein el Ziyara of Kerbela, a revered holy man, produces microfilms Carmichael sent him through wandering cinema showmen Victoria and Richard had previously encountered. Dakin recites an agreed passphrase, and the Sheikh releases the proof. Dr. Rathbone, exposed as a swindler blackmailed into complicity, makes a final plea for peace.
In the aftermath, Dakin confirms the scarf contained a knitted register of names, and the document Richard delivered, when treated with iodine vapor, revealed the passphrase for retrieving the microfilms. Victoria admits her infatuation with Edward was shallow glamour, not love. Richard offers her a position on the excavation, and she eagerly accepts. Dr. Pauncefoot Jones's cheerful remark hints at a romantic future between Victoria and Richard, which Richard calls "just a little premature."