Cora and Rodney, a middle-aged couple from Boston, decide to move to the red water, an inland ocean in Arizona made to imitate the rapidly disappearing coastline. On one of their first nights there, they're invited to dinner by their strange neighbors, Arn and Phyllis Nevis. Arn, a brute of a man, almost drowns in the red water, but Rodney jumps in to save him.

The next day, Cora, a photographer, goes with Rodney to capture the sunrise. After Rodney swims in the pond, they visit the desalination plant next to the water. They learn that the water is red because of archaebacteria colonies. Meanwhile, Katherine, their neighbors' daughter, goes to the beach with her friends to watch swimmers and get high on oven cleaner. Rodney sees Katherine from the pier and goes to say hello. After he wipes dirt off her face sensually, Nevis appears and drives Katherine away.

As the days go on, Rodney and Cora start to develop a routine, but Rodney grows restless and develops a fascination with Katherine. He invites the Nevis' over for dinner, but Arn declines because he is showing a home in the neighborhood to a prospective buyer. Arn behaves strangely at the house, jumbling words and names. Rodney begins to experience insomnia and one night hops the fence to the Nevis' home and finds Katherine swimming. Despite her protests, Rodney kisses the child and attempts to have sex with her when suddenly they both look up and see Arn.

The next day, Rodney gets a call saying that Arn had an aneurysm and is in a coma in the hospital. Rodney brings food and wine to the Nevis' home, where he and Phyllis grieve Arn together.