On a deserted beach, Captain Stottlemeyer stands alone, waiting. And who should emerge from behind the rocks but Adrian Monk, last seen falling into the bay after being shot twice in the chest by Stottlemeyer. Thanks to a bulletproof vest, Monk is only a little worse for wear. But, as the two friends had planned, the rest of the world thinks he's dead. So Stottlemeyer hands Monk some dry clothes and sends him off with instructions to lie low until they can figure out what Sheriff Rollins is up to.
While a distraught Natalie plans an elaborate memorial service for her boss, Monk settles in a small town in Nevada. He finds himself work at a carwash and rents a room at a local motel, where he continues to gather as much information as he can about Rollins and the case. Monk tries to stay under the radar, but when the motel owner's daughter mentions a local unsolved hit-and-run, Monk's detection skills kick into gear.
And Monk's not the only one making discoveries. Back in San Francisco, Sheriff Rollins receives a phone call from his mysterious employer, who harbors suspicions about Monk's alleged death. Captain Stottlemeyer, meanwhile, makes some important discoveries about Sheriff Rollins, whom he learns has recently come into some money - more money than a local sheriff would be making. And Natalie learns about a carwash employee and amateur detective in Nevada whom the newspapers are calling the "Carwash Columbo." She confronts Captain Stottlemeyer with her suspicions that the carwash employee is actually Monk, and the Captain admits the truth. He makes Natalie promise not to try to see Monk, but she refuses to listen and takes off in her car. Unfortunately, Sheriff Rollins is hot on her heels, and he's got orders from his mysterious phone buddy to finish Monk off.
In Nevada, Natalie shows up at the carwash and greets Monk joyfully. The happy reunion is cut short, however, when Rollins turns up with a gun. Monk and Natalie manage to escape in the sheriff's car, and call Captain Stottlemeyer and Disher with a business name they find on a fake check in Rollin's briefcase. Disher is able to trace the check to a familiar source: billionaire Dale Biederbeck, whom Monk had been responsible for putting behind bars years before.
Natalie pays Dale the Whale a visit in jail, and learns that Biederbeck is plotting his revenge against Monk. He won't give her any information about his plans, but Natalie does film a message from Biederbeck to Monk. When she and Monk review the tape later, they see on Biederbeck's computer screen that he has been checking the weather in Riverton - the same town Frank Nunn had mentioned visiting just before he was shot. Monk realizes what is going on: Biederbeck has been plotting to kill the Governor, who had refused to commute his sentence. The governor is scheduled to appear in a parade in Riverton that very day, so Monk and Natalie race to Riverton, where the parade is already underway. And though Sheriff Rollins tries to prevent them from stopping the parade, Monk is able to shut off the Governor's car just before the bomb planted beneath it is triggered. The Governor is saved, Rollins is arrested, and Monk's name is finally cleared.
Monk pays Dale Biederbeck, still behind bars and now forced to survive in much less luxurious accommodations, a visit. Biederbeck is full of bravado, but he isn't able to get to Monk. As it turns out, the police had found letters in Frank Nunn's apartment referring to Trudy's murder. In those letters, Nunn had mentioned who hired him, someone he referred to as "The Judge." Monk has finally found what he has spent years desperately searching for: a clue. For the first time in years, he is one step closer to finding out the truth about Trudy's murder.