In sultry South Florida, womanizing low-rent lawyer Ned Racine begins an affair with Matty Walker, the young wife of shady businessman Edmund Walker. The affair becomes a consuming passion, but the two keep it secret. Matty tells Ned that she wants a divorce, but a prenuptial agreement would leave her without Edmund's fortune. When she wishes Edmund dead, Ned suggests murdering him. Matty says she wants to forge a new will, but Ned warns her that would attract suspicion.
Ned runs into Matty and Edmund at a restaurant. Matty introduces Ned as a lawyer who has been asking about buying the Walkers' home. The three have dinner during which Edmund states, after Matty briefly absents herself, that he would kill any man who was having an affair with his wife.
Ned then meets with an old client, arsonist/bombmaker Teddy Lewis, who builds him an incendiary device. Ned fabricates an alibi by traveling to Miami, where he checks into a hotel and then drives back home in the night. After Ned kills Edmund, he and Matty move the body to an abandoned building owned by the victim. Ned sets the bomb to destroy Edmund's body and mislead the police. Ned and Matty part and agree to have no contact until Matty takes possession of the estate.
Soon afterwards, Edmund's lawyer calls Ned about Edmund's new will, which had supposedly been drafted by Ned; the will was supposedly witnessed by Mary Ann Simpson, a woman Ned once met in passing but who is nowhere to be found now. The new will has been improperly prepared, violating the rule against perpetuities, and the local judge, with a poor opinion of Ned, nullifies it, leaving Matty the sole beneficiary and disinheriting Edmund's niece, Heather. Ned realizes that Matty has disregarded his warning and forged the will, calculating that it would be nullified. Matty pleads for forgiveness, pledging her love for Ned.
The case is investigated by Ned's friends, prosecutor Peter Lowenstein and detective Oscar Grace. They suspect that Matty is involved in her husband's death and warn Ned against seeing her; Ned begins openly dating Matty to throw them off. The police deduce that Edmund was not killed at the arson scene because his glasses were missing. Also, Matty appears to have lied about Mary Ann Simpson. Oscar begins to suspect Ned when he realizes that Ned's alibi in Miami does not hold. Edmund's niece, who once caught Matty and Ned having sex, is brought to the police but does not recognize Ned.
Increasingly nervous and questioning Matty's loyalty, Ned happens upon an acquaintance who says he recommended Ned to Matty. Later, Teddy tells Ned about a woman who wanted to know how to rig a bomb to a door. Matty calls Ned, claiming that her maid had agreed to return the incriminating glasses after she paid her off. She asks Ned to pick up the glasses from her boathouse. There, Ned spots a wire attached to the door. Matty arrives, and Ned asks her to get the glasses and she agrees. Oscar arrives and observes their interaction. Matty walks toward the boathouse, which explodes. A body found inside is identified from dental records as that of Matty.
Now in prison, Ned intuits (and tries to convince Oscar) that "Matty" is still alive. Ned believes she assumed the identity of a former schoolmate, Matty Tyler, to conceal her sordid past from Edmund. Ned surmises that the "Mary Ann Simpson" whom he had previously met had discovered the scheme and was blackmailing Matty, only to be murdered and her body planted in the boathouse. That is why the dental records matched. Had Ned been killed in the explosion, the police would have found both suspects' bodies and closed the case. Oscar is not convinced and reminds Ned that he actually did kill Edmund.
Ned obtains a copy of Matty's high school yearbook: in it are photos of Mary Ann Simpson and Matty Tyler, confirming his suspicion. Below Mary Ann's photo is the nickname "The Vamp" and "Ambition—To be rich and live in an exotic land". The real Mary Ann is seen lounging on a tropical beach living a new life.
The murder plot unravels, exposing Ned to betrayal, legal jeopardy, and devastating consequences as the truth about Matty and the forged will comes to light.
Body Heat closes with the scheming and lustful ambitions of its protagonists leading to their downfall. Ned's misplaced trust in Matty and his willingness to cross ethical lines leave him both culpable and victimized, while Matty’s manipulation cements her role as a quintessential neo-noir villainess. The ending drives home the film’s exploration of greed, obsession, and the lethal costs of desire.