A Phoenix secretary embezzles $40,000 from her employer's client, goes on the run, and checks into a remote motel run by a young man under the domination of his mother.
After 22 years in a mental institution, Norman Bates has been cured of his insanity and accepted that his mother is dead. As such, the court has him released. Lila Loomis, sister of Marion Crane, vehemently protests, but her plea is dismissed. Against the advice of Dr. Bill Raymond, Norman takes up residence in his old home behind the Bates Motel. He reports to a prearranged job at a nearby diner, where an old lady named Emma Spool works. After work, a young waitress at the diner, Mary Samuels, has been thrown out of her boyfriend's place. Norman offers to let her stay at the motel, then extends the offer to his home when he discovers that the motel's new manager, Warren Toomey, has been using the motel for dealing drugs. He immediately fires Toomey.
In 1982, Norman Bates works at the Bates Motel and lives with the preserved corpse of Emma Spool, whom he erroneously believes to be his mother. Local law enforcement and Norman's ex-boss, Ralph Statler, are concerned because Mrs. Spool has been missing for over a month. Duane Duke, a sleazy musician desperate for money, is offered the job of assistant motel manager to replace the late Warren Toomey who was fired by Norman. Tracy Venable, a journalist from Los Angeles, is working on an article about serial killers being released. She believes Norman is killing again, so when Norman appears at the diner, Tracy attempts to talk with him. Unaware of her ulterior motives, Norman opens up to her but is distracted when Maureen Coyle, a young, mentally unstable former nun, enters. He is startled because she resembles his former victim, Marion Crane. Seeing the initials "M.C." on her suitcase, Norman panics and leaves the diner.