Feeling upstaged by Harry's feat and his persistent contempt to work without him as a partner, Bernie takes a small cassette recorder out of his pocket and vengefully plays back a recording of Harry's intimate conversation with Meredith: "I've gotta give credit where credit is due, right? I mean abracadabra, Harry. You see, I'm number two Harry, I have to try harder....The bugger got bugged, huh?" When Harry slowly realizes that the taping was made using the pen microphone in his vest pocket, he breaks the wiring mechanism between his hands and orders them out. Only Meredith is allowed to remain behind when she asserts: "I'm gonna stay."

Instead of talking to Meredith, Harry replays the tape, listening even more intently and interpreting that Ann's singing of the "Red, Red Robin" song reveals how "frightened" she was:

Harry: (whispered) It's no ordinary conversation. It makes me feel...something.
Meredith: Forget it, Harry. It's only a trick.
Harry: What?
Meredith: A job. You're not supposed to feel anything about it. You're just supposed to do it. That's all. Relax, honey.

[tape: ...walking around in circles...he's not hurting anyone. Neither are we. Oh God...I always think he was once somebody's baby boy...and he had a mother and a father who loved him and now there he is half-dead on a park bench and where are his mother or his father or his uncles now...Later in the week, Sunday maybe...Sunday definitely...Jack Tar Hotel, three o'clock, Room 773...God, it will be so good to be finished with all this...I love you...We're spending too much time together here...No, let's stay just a little longer...]

...as Meredith kisses him full on the mouth and leads him back to the sofa. Lying half-inert on the sofa, Harry still listens closely, noting the painful expression in Ann's voice when she says: "Oh God." Meredith removes her clothes, as the camera zooms in slowly toward Harry's perspiring face - she slips naked onto the sofa beside him and wipes his face with the edge of the blanket. She tenderly caresses his face, calls him "angel," reassures him "It's all right, baby," and kisses his forehead, cheek, and neck. At that point, he whispers part of the line obscured by the bongo drums, and vows to destroy the tapes to prevent another murderous outcome. All the while, Meredith kisses him, whispers absolution ("I forgive you, darling"), and seductively puts her tongue in his ear:

kill us - [tape: he'd kill us if he had the chance] Oh God, what I have done. I have to destroy the tapes. It cannot happen again. The family was murdered because of me. Oh God, no protection. I can find them wherever they go, and I can hear them.

Underneath an electronic humming noise, Harry dreams of trailing after Ann in a thick, fog-enshrouded park area - it is an hallucination of her death, an eventuality that he wishes to prevent. He calls out to her as she walks above him on a top level walkway and then disappears beyond the grass terracing into the mist:

Listen, my name is Harry Caul. Can you hear me? Don't be afraid. I know you don't know who I am, but I know you. There isn't much to say about myself. I - was very sick when I was a boy. I was paralyzed in my left arm and my left leg and couldn't walk for six months. When doctor said that I'd probably never walk again. My mother used to lower me into a hot bath - it was therapy. One time the doorbell rang and she went down to answer it. I started sliding down. I could feel the water starting to come up to my chin, to my nose, and when I woke up, my body was all greasy from the holy oil she put on my body. And I remember being disappointed that I survived. When I was five, my father introduced me to a friend of his, and for no reason at all, I hit him right in the stomach with all my strength. And he died a year later. He'll kill ya if he gets the chance. I'm not afraid of death but I am afraid of murder.

In a premonition, Harry sees himself entering Room 773 in the Jack Tar Hotel where he witnesses a retaliatory attack - presumably on Ann. There's blood on the curtains and blood on the bathroom walls. When he awakens abruptly, wraps himself in the blanket, and stumbles over to the tape recorder, he discovers that Meredith has stolen his tapes of the conversation. Realizing that he's been had by the wily female and that she was under Martin's employ as a seductress, he mutters to himself: "Bitch!"

Day Five (Sunday):

From his apartment, he is unable to reach Martin Stett by phone and is told: "We'll get right back to you." The office receptionist suddenly hangs up without getting Harry's telephone number for a call-back. Mysteriously, he soon receives a return phone call - Harry focuses all his attention on the ringing mechanism, debating whether to answer it. Martin informs him that they have prepared a "full dossier" on him - as the mega-corporation routinely does for all persons who have contact with the Director. Harry acts with paranoia and unease about being told that he is being bugged under their watchful surveillance:

You know that means we've been watching you. We have the tapes. They are perfectly safe. The Director was very anxious to hear them as soon as possible and you seemed to be, I don't know, disturbed. I couldn't take the chance that you might destroy our tapes. You understand, don't you, Mr Caul? Our tapes have nothing to do with you. Why don't you come over now and bring the photographs? The Director's here and he's prepared to pay you in full.

At one o'clock, Harry makes his way into the executive offices of the corporation, wearing his gray slicker and carrying his blue pouch with photographs. He pauses at the door of the Director's office - marked PRIVATE - listening to the playback of the tape. As he enters, a trained black Doberman Pinscher attack dog trots in behind him. In the room, Martin, the Director (an uncredited Robert Duvall), and Harry awkwardly stand and listen. On the wall is a nicely-framed photograph of Ann, captured by the camera at the point in the tape where Mark expresses his intimate relationship to Ann, calling her "honey":

Martin: Do you want to hear that again?
The Director: (angrily) You want it to be true!
Martin: (defensively) No, I don't. I just want you to know whatever you need to know. That's all.

On the desk is another picture of the Director with his wife Ann, dining at a restaurant. After collecting his $15,000, "blood money" in fact, Harry asks the Director about the fate of his adulterous wife: "What will they do to her?" On the tape, Mark's voice announces her judgment for unfaithfulness - a death sentence: "He'd kill us if he got the chance." Neither Martin or the Director provide an answer to Caul's question, so Harry decides to try and circumvent the impending, inevitable tragedy.

At the reception desk of the Jack Tar Hotel - around three o'clock (the time of the illicit rendezvous and liaison), Harry rents the room next to Room 773. A "DO NOT DISTURB" sign hangs on the doorknob of Rm. 773. He enters the adjoining room, presses his ear against the wall, and listens. He has checked into the adjoining room in the hotel where he fears that the murderous confrontation will occur. He steps out onto the narrow terrace and peeks around into the terrace of the neighboring room. He listens through the bathroom vent and then determines that the best location to hear sounds from next door and 'flush out' the conspiracy is under the bathroom sink.

From a blue plastic attache case, Harry removes the tools of his profession and quietly pokes a drill hole into the next room. He then pokes a sharp instrument into the small hole in the thin wall and wires it to a small electrical box. Then, huddled and crouched down uncomfortably under the sink counter, he listens with a small set of earphones around his head - hearing the conversation he taped and reactions to it:

The Director: I'm tired of this lying, all right. I'm tired of lies!

(Tape)
Ann: It's all right. We can talk.
Mark: I can't stand it. I can't stand it anymore.
Ann: You're gonna make me cry.
Mark: I know, honey, I know. Me too.
Ann: No, don't.

Ann: (protesting) I have no idea what you're talking about. No idea! This is all a big lie. Don't you understand it?

(Sound of tape being fast forwarded)
Ann: I love you.

He jumps out from under the sink when he hears a loud, but muffled thump noise from the next room. After further shouts, crashings, and sounds of violence - heard through the wall's decorative painting of San Francisco Bay, he steps out on the terrace where he hears Ann's blood-curtling scream and witnesses an atrocity being committed through the translucent divider. He imagines that she is being killed. He clasps his ears in his hands, his eyes widening in horror. After closing the drapes on his room's window, he attempts to drown out the sounds of terror by turning up the volume on the hotel room's television (a broadcast report about President Nixon deciding not to deliver a State of the Union message in person), and by burying his head under the blanket on the bed. The surreal nature of the scene suggests that the savagery in the next room may be in Harry's imagination.

After an undetermined amount of time, Harry looks up from his bed where he has either fallen asleep or passed out - the television is still on, playing a late-night Flintstones cartoon program, with Fred pacing the floor and exclaiming: "How can she be so calm when she knows what I'm going through?...Just waiting, waiting, waiting..." Harry turns off the set, emerges into the eerily quiet hallway, and moves from his door to Room 773. The DO NOT DISTURB sign has been removed. After knocking softly, without an answer, he picks the lock and cautiously steps into the ill-fated room.

Everything is spotlessly clean and made up for the next guests - there is no trace of foul play and the horror he thought he heard. In the bathroom, the toilet bowl has been banded with a strip marked: "SANITIZED FOR YOUR PROTECTION." He hesitates to pull back the closed shower curtain - afraid of what may be behind it, but the sparkling tub is empty. A pro in the business, he checks the drain, but there are no signs of blood drops. Doubting that he ever heard anything, Harry is about to leave, but then flushes the toilet. Suddenly, the water in the clogged toilet turns red and begins to rise - spewing forth bloodied water onto the tile floor. Wads of tissue paper that were soaked in blood had clogged the pipes.

Day Six (Monday):

Harry runs through the street to catch a bus to take him to the office building of the Director. He is not permitted in by the receptionist, and a guard resists his unauthorized entrance. Parked on the outside curb is a stretch limousine with a corporate license plate reading "C 1." To his surprise, femme fatale Ann is seated inside the back seat's curtained area. Harry is astonished to see her alive - and to read the newspaper headlines at a newstand: "Auto Crash Kills Executive" with a picture of a mangled automobile. The surprise denouement is a death sentence, but not what he foresaw.

Looking on, Harry sees press reporters and photographers surrounding Ann as she leaves the lobby area - inheritor of her husband's stock, property and fortune. They ask her about the tragic "accident" and "corporate control - will your stock now give you controlling interest?" As she moves by, she glances up and notices Harry - she turns to Mark and makes him take note of Harry. Realizing that he is the only one who has knowledge of the homicidal circumstances, he relives his visit to Room 773 - now colored by his new perception of the young couple as ruthless killers. (Ann lured her husband to the hotel room, where Mark murdered him.) He sees bloody walls, and the stabbed and deceased Director lying on the bed under a plastic sheet that was used to suffocate him - disguising his death so that it would look like an accidental automobile crash. The words on the tape resonate more richly in his mind:

He'd kill us if he got the chance.

In his apartment, Harry again sits in the middle of the room playing his saxophone to the accompaniment of a jazz record. The phone rings - as he walks off-screen to get it, the camera hesitates, and then pans left to the phone. There is no answer - only a dial tone. As he returns to his chair off-screen, the camera again hesitates, and then pans right. Harry continues to play until the phone rings a second time, with the same unusual camera movement. He hears the sound of winding tape and then Martin's voice:

We know that you know, Mr. Caul. For your own sake, don't get involved any further. We'll be listening to you. (He hears a playback of his own saxophone playing)

Paranoid, he knows that his apartment is expertly bugged, and that his life is now exposed and left shattered by his personal involvement. With a de-bugging device, he scans the wall and visually searches for hidden bugs. The camera encircles him - enveloping his entire life. He can't believe that the corporation has planted a bug somewhere in his presence. He unscrews a cover from a switch mechanism, removes his heater screen, inspects his drapes, dismantles the light fixture, exposes the insides of his phone and ritualistically tests it with a voltage meter, and finally smashes and tears apart an innocuous, plastic Madonna statuette. He rips out the venetian blinds (revealing that the building behind his apartment has now been entirely torn down), destroys his picture frames, peels wallpaper, and uses a hammer and crowbar to pry off door frames and pieces of the hardwood floor.

The final mocking, voyeuristic, observational shot - from a hidden camera - pans left and right (and left again) across the disintegrated rubble of his stripped-down apartment. He sits amid the devastation playing a truly solo blues number on his saxophone, assuaging himself with its sound. He has not found the bug and is the ultimate victim of electronic surveillance, stripped of all personal privacy.