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The novel is set in a dystopian future United States, albeit one which is entering a post-totalitarian era with prospects of future democratic reform. Set in a then-future 1988, it extrapolates events from the late sixties and early seventies. These culminated in a "Second Civil War", also called the "Insurrection", which led to the collapse of democratic institutions in the United States and elsewhere. The National Guard ("nats") and US police force ("pols") re-established social order through instituting a dictatorship, with a "Director" at the apex, and police marshals and generals as operational commanders in the field. Compulsory sterilization of African Americans has sharply reduced their population, and, after the laws for sterilization were eventually reversed, increased their social status to the point where even verbally harassing someone of colour is considered to be a major crime. By comparison, radicalised former university students eke out a desperate existence in subterranean kibbutz communes. However, there appears to be no social barriers to the use of recreational drugs in this future, nor are some forms of paedophilia a crime.
After his former lover throws a Callisto-based parasite lifeform at him, celebrity entertainer Jason Taverner wakes up one morning to find himself to be completely unknown to the outside world. He has no identification, there is no record of him in the extensive databases of the police government, and neither his friends, nor do his former fans have any memory of him. As an ex-celebrity and an ex-citizen, he has real problems. These are exacerbated for him as a "Six", a highly rated stratum of covert genetic engineering of humans that apparently began in the 1940s (although why this occurred, and who instigated this process, are left unclear).
Taverner's story is intertwined with those of Police General Felix Buckman and his hypersexual sister Alys Buckman, who has an incestuous relationship with him, but otherwise seems to be lesbian. They have a son born of their union, Barney. After police surveillance detects his lack of identification, Felix interrogates Taverner, but then is forced to let him go, whereupon Alys invites him to stay at her apartment.
Alys is a heavy user of recreational drugs, including KR-3, a new reality warping variety. Initially, she also appears to be the only person left who recognizes Jason Taverner. However, the drug has a devastating metabolic side effect. After Jason takes mescaline himself, he is horrified to find Alys' skeleton and leaves her home, before meeting Mary Ann Dominic, a potter. As they discuss his recent experiences in a cafe, Taverner's existence returns to normal as the effects of the KR-3 that Alys took finally wear off posthumously.
Felix discovers that Alys had a lesbian affair with Heather Hart, another elite "Six" (and one of Jason's ex-lovers). KR-3 caused her brain to become "unbound" from her own alternate reality, so she could perceive and interact with those of an adjacent world, where Jason Taverner did not exist. She fixated on Taverner due to her appreciation of his musical talent. Jason surrenders himself to the police, so that he can be cleared of Alys' death, which duly occurs. Heartbroken, Felix then travels to the countryside to mourn the loss of his sister and lover.
In an epilogue, the final fates of the prior characters are disclosed. Felix Buckman retires to Borneo where he is assassinated for writing an exposé of the global police apparatus. His son Barney becomes a police officer as well, but is invalided out of the service, and becomes an antiques collector. Jason Taverner dies of old age after a lifetime of hedonism, while Heather Hart abandons her celebrity career, and becomes a recluse. Mary Anne Dominic's pottery wins an international award and her works become of great value while she lives into her eighties. Ultimately, the revolutionary students give up and voluntarily enter forced-labor camps. The detention camps later dwindle away and close down, the police-state government no longer poses a threat, and police marshals are abolished in 2136 CE.
For Dick, such a decisive narrative resolution is unusual in his extended fiction. His novels usually end ambiguously for the central characters.
The themes of celebrity, genetic enhancement, altered reality, and drugs are interwoven with discussion of the value of love and the meaning of identity.