A day before her marriage, Reshma (Vidya Balan) runs away from her rural village, hoping to become a star in Chennai. She fails to impress a casting director, and he insults her for being unattractive and unable to act. Determined to secure a role, she spontaneously auditions for the position of a background dancer. However, she dances in a sultry manner, using erotic movements which annoys the film's director, Abraham (Emraan Hashmi). He edits out Reshma's entire dance sequence. The film fails at the box office, much to the dismay of the producer Selva Ganesh (Rajesh Sharma), who later recalls Reshma's performance and offers her a role in a song in his upcoming film. Selva also suggests that she now be referred to as "Silk", which is more exotic and captivating.

At the first shoot, Silk dances with veteran actor Suryakanth (Naseeruddin Shah), her childhood idol. Enamoured with him, Silk gains his affection and attention by offering a long-term sexual relationship. Meanwhile, Abraham proposes a new film to Selva Ganesh and is keen to cast Suryakanth. However, Suryakanth's suggestion of adding sex and eroticism, to make the film more commercially viable, angers Abraham. Silk slowly builds a name for herself in the industry and goes on to do many more sexually charged films with Suryakanth, which catapults her into stardom. She gains many male fans and, in a short time, becomes immensely rich and popular as a Southern sex symbol.

Suryakanth's younger brother Ramakanth (Tusshar Kapoor) is an admirer of Silk and starts to befriend her. Silk develops a liking for him, after she realizes that he is the first man who loves her for more than just her body and sex appeal. At an awards ceremony Silk is praised for her performance but is insulted by Suryakanth who tells her that she is nothing more than everyone's "dirty secret". Hurt by his remarks, Silk announces that she will continue to make her "dirty pictures" and that she has no qualms in doing so. She begins to spend more time with Ramakanth and becomes the focus of tabloid gossip after noted journalist Naila (Anju Mahendru) criticises Silk for having a romantic relationship with both brothers. To avoid scandal, and also to get revenge, Suryakanth drops Silk from his forthcoming films, forcing her to work with smaller, unknown filmmakers. She loses interest in her work and begins to feel threatened by a younger aspiring actress, Shakeela. During a dance challenge she intentionally trips Shakeela, much to the embarrassment of Ramakanth who then decides to end their relationship.

To ease her heartbreak and the rejection from her family, Silk turns to alcohol and chain smoking. She gains weight, causing her to lose her status as a sex symbol. Silk approaches Silva Ganesh with an offer to produce a film together. Ultimately, the audience and industry has lost interest in her, and the film fails. On the other hand, Abraham directs a film which turns out to be a huge hit, and he feels that he has finally proven to Silk (and himself) that his films do not need any sexualisation to be successful. Having lost her fame and fortune, Silk has accumulated so much debt that she approaches a small-time filmmaker, willing to take on any role. She is shocked to find that he wants her to do a pornographic film, and she refuses. He intoxicates her with alcohol and starts filming, without her permission. The place is raided by the police but Silk manages to escape.

Abraham finds himself falling in love with Silk, even though he denies it first, as he struggles with this moral dilemma. During a phone conversation with Silk, Abraham becomes alarmed when she asks him to bid farewell to everyone for her. He rushes to her house, and finds her lying in bed dead from a sleeping pill overdose, along with a suicide note written by her.

The film ends with Abraham's narration, examining the life that Silk has led, and he questions whether the consequences she faced from her actions were justified or not. He concludes by realizing that we will never know if her way of life was right or wrong, or if we should judge her at all.

• Vidya Balan as Reshma/Silk, a rebellious and independent woman. She runs away from her rural home at a young age to nurture her dream of becoming an actress. She is uninhibited in expressing her sexuality.
• Naseeruddin Shah as Suryakanth, an ageing South Indian superstar. He is involved in extramarital relationships and has a secret affair with the much younger Silk.
• Tusshar Kapoor as Ramakanth, Suryakant's brother and a writer for one of his forthcoming films. He is attracted to Silk but, unlike his brother, is empathetic towards her.
• Emraan Hashmi as Abraham, a director and the narrator of the film. He dreams of making critically acclaimed films. He initially hates Silk and her over sexualisation of the film industry.
• Anju Mahendru as Naila, a journalist who writes sensationalist articles about Silk but secretively admires her courage.
• Rajesh Sharma as Selva Ganesh/Keedadas, the producer of most of Silk's films
• Imran Hasnee as film director Vijayan
• Mangal Kenkre as Ratnamma, a confidante of Silk.
• Arya Banerjee as Shakeela, an up-and-coming young actress who compares herself to Silk
• Mohit Sinha as Manorma
• Shivani Tanksale as Raadhika
• Lavin Gothi as a fan of Silk

Development

Ekta Kapoor launched the film with director Milan Luthria soon after their collaboration Once Upon a Time in Mumbaai became a hit. She said that The Dirty Picture would be India's answer to the Academy Award nominated film Boogie Nights. Later in a press conference, Kapoor clarified that neither of Balaji's forthcoming films, Ragini MMS nor The Dirty Picture, were "porn films" as they had been made out to be.

Kapoor has gone on record to add, "I would be surprised if I don't get unbelievable critical acclaim for The Dirty Picture and a national award for my actress, Vidya Balan. The film has one of the most well-written scripts I have come across and a lot of youngsters in my office have looked at it with great admiration." She pointed out that the purpose of the film was neither to justify nor criticise Smitha's life but for the audience to live her life. Additionally, all actors, including Balan and Shah attended workshops for almost two months before filming began, to familiarise themselves with the body language of their characters.

When screenwriter Rajat Aroraa initially started working, taking cues from producer Kapoor, the scope of the film was much smaller, primarily looking back to the soft-pornography scene of the 1980s. As work progressed, the scope gradually widened to include the controversial romances of Smitha through a fictionalised biopic. While researching for the film, director Luthria and screenwriter Aroraa found little material in magazines of that period, as "women like Silk Smitha were often ignored by film magazines, except for gossip column mentions". Thus they derived many of the details of her life from anecdotes and party gossips, and then fictionalised them. Apart from depicting the pomp of the Telugu/Tamil film industry, the screenplay takes up issues such as money management by actors, "their string of broken relationships", and the way they "led lonely lives and met with tragic ends". For inspiration, instead of looking at South Indian films of the period, the team turned to the work of mainstream Bollywood directors like Manmohan Desai, Vijay Anand, Raj Kapoor, Feroz Khan and G.P. Sippy. To put the global soft-porn industry in context, the team looked into Boogie Nights (1997) and The People vs. Larry Flynt (1996). The final script became a "fictionalised, women-oriented, generalised perspective on the 1980s film industry".

Casting

After initial talks with actresses Kangana Ranaut and Bipasha Basu fell through, Vidya Balan was offered the lead role. When Balan was narrated the script and shown sketches of what she needed to wear for the portrayal, she felt uncomfortable. Luthria added, "We couldn't have found anyone better than Vidya for this role. It's a casting that very few would think is viable because it is going to be nothing like Vidya has done before. But I am confident she will push the envelope as far as she can".

Regarding the criticism that Balan's character might evoke, Luthria clarified, "I wanted Vidya to know that what she's doing is not crass or crude but can be shown aesthetically in a sensual manner with a touch of class. What her character does, is not cheap." As a referenc