The first leading role for Michael Keaton, and both Kevin Costner and Shannen Doherty's film debuts.
Chuck is nearly killed by the two guys who killed Belinda's original pimp. The guys Billy brought in are undercover cops, who arrest the killers and bust Chuck and Billy. In order to sweep all this under the rug, the city offers their old jobs back. Chuck accepts but Billy refuses and is fired. Chuck eventually gets back together with Belinda and he makes up with Billy.
Mild-mannered Chuck Lumbly (Henry Winkler) quit his successful but stressful job as a stockbroker and now works at the New York City Morgue. He has just been "promoted" to the supervisor of the night shift so his boss can make room for his do-nothing nephew. On his first night, Chuck meets his new partner, Billy Blazejowski (Michael Keaton), a.k.a. Billy Blazes. Because business is slow on the night shift, Billy uses morgue vehicles as limos to make extra cash. Billy is also constantly talking to Chuck about crazy get-rich schemes, but all Chuck wants is peace and quiet.
One night, the body of a pimp who was murdered is brought into the morgue, and his remains are identified by one of his prostitutes, Belinda (Shelley Long). She recognizes Chuck as a neighbor at their apartment building, but he doesn't know her. A few nights later, Chuck comes home from work and sees Belinda beat up in their elevator. She tells Chuck that because her pimp is dead, she and the other ladies he protected are at the mercy of customers who refuse to pay or get rough. They would go to another pimp, but they are just as dangerous, if not worse. Chuck tells of her plight to Billy, who suggests that they become their pimps and work out of the morgue. At first Chuck is against it, but as he and Belinda get to know each other better, the more he becomes in favor of it. When Chuck is asked to bail out Belinda, but has to take his entire family to night court to get her out, and they all decide he will be "straightened out" once he and his overbearing and neurotic fiancee Charlotte marry, Chuck goes to Billy and tells him yes.
Chuck and Billy assemble Belinda and her "co-workers" and tell them that if they work for them, they will only take 10% of their fee, instead of a pimp's usual 70-90% cut, and invest it. The ladies agree, and soon the money is rolling into the morgue. While Billy rounds up the customers, Chuck uses his stockbroker knowledge to increase their money so much that he is able to give the girls medical and dental as well as a profit sharing plan. He even buys a fast food restaurant for them. After a while, though, Chuck is beginning to feel the same stress he felt as a stockbroker on Wall Street just before he quit. He thinks it's only a matter of time before they are caught, but Billy says they have nothing to worry about. In the meantime, Chuck and Belinda are becoming closer, and are falling for each other. Finally, they kiss and have sex. But Chuck is heartbroken when Belinda comes in to work the next night. She tells Chuck that she has to work because she can't do anything else. They then get in an argument and break up.
Meanwhile, the two guys who killed Belinda's original pimp learn about Chuck and Billy's venture. While they pay Chuck a visit at the morgue, Billy is chatting up a pair of guys at a nightclub, not realizing they are undercover cops. He takes them to the morgue, only to find the killers about to kill Chuck with a firehose. The cops take the killers into custody, as well as Chuck and Billy. At the jail, Charlotte sees Chuck and confronts him about his business venture and breaks up with him. The ladies later bail out Chuck and Billy, but Chuck notices that Belinda isn't with them. The next day, the city's lawyer tells them that they are embarrassed with the whole scandal, and just wants to sweep everything under the rug and offers them their old jobs back if they end the venture. Chuck is thrilled to have his old life back, but Billy isn't. He wants to get something for his troubles, but all that gets him is a fight with Chuck and being fired from his job.
Some time later, Chuck sees Belinda in the hallway. He is happy to have his old life back, and she is now working at a members-only pleasure club and moving to a condo she bought with her earnings. Seeing her again triggers a new attitude in Chuck, and the formerly mild-mannered man goes to her club to get her back. But when he enters the club, he runs into Billy, who now works there as a towel boy. Chuck then sees Belinda and tells her he loves her, and she says she loves him too. He also apologizes to Billy for the way their friendship ended. The manager sees the trio and berates them for disturbing the customers, but Chuck responds by pushing him into a pool and running out of the club with Billy and Belinda close behind. The movie ends with Chuck and Belinda kissing outside of the club, and as they walk off to start a new life together, Billy tags along, spouting out new ideas for them to try.