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Reporter Philip Redfield gets lost while driving with his dog, Rollie on unfamiliar back roads, and stops in Peaceful Valley, New Mexico, to get food, directions, and gasoline. The gas station attendant fills his tank but is curt and claims the only restaurant in town is closed. Rollie leaps out of the car to chase a little girl's cat up a tree. The girl uses a strange device to make the dog disappear. When Philip confronts the girl's father, he pretends to go looking for Rollie, then secretly uses the device to make the dog re-materialize.
Philip and his dog seek food at the town's hotel. Ellen, the proprietor, is as curt as the gas station attendant and insists they have no rooms available even though the keys to all the rooms are still on display at the check-in desk. Philip's suspicions are fully aroused by this time, but questioning Ellen about the residents' strange behavior gets him nowhere. He drives out of town only to run into an invisible wall which totals his car and kills Rollie. A band of Peaceful Valley residents are waiting at the scene and take him to the town elders while another resident brings Rollie back to life.
The town elders question Philip on why he came to Peaceful Valley and whether anyone knows where he is. They show him some of the technology they have, including a replicator which can produce any object given its molecular formula and a ray which can reverse any injury, including death. The town refuses to share this technology, given to the town elders 104 years earlier by a scientist from an unknown planet, until "men learn the ways of peace." Philip rebukes them for decreeing themselves the sole people capable of using these extraterrestrial gifts responsibly, and for squandering technology that could be used to cure all illness and end hunger. The town elders insist that if they shared the technology it would be used for weapons, and tell Philip that due to his chance witnessing of the device used to make his dog disappear, he must either stay forever in Peaceful Valley or be executed to preserve the town's secrets.
Philip is a complete prisoner in his new home, with the invisible wall placed to keep him from even leaving his yard. He becomes romantically involved with Ellen, and tries to make her realize her own lack of freedom, deducing that the town elders would not let any of Peaceful Valley's residents leave for fear that they would reveal the town's secrets. Seemingly persuaded that he cannot reciprocate her love unless she sets him free, Ellen disables the invisible wall and offers to drive Phillip out of town. He asks to make a stop to retrieve the "book of formulas" containing the equations explaining the town's technology. There, he uses the replicator to make a revolver. Opening the door of the safe that holds the book of formulas sets off an alarm, and the three town elders attack him. He shoots them.
Once Philip and Ellen are outside the town limits, she shows him that the book of formulas is blank, then uses a device to de-materialize him. Ellen was a plant, Philip's entire escape a test. The town elders, revived by the technology, claim his decision to create and use a gun confirms their belief that the people of Peaceful Valley are the only ones fit to use the alien technology. Ellen confesses her involvement wasn't all a lie, implying that her feelings for him were real. The elders then use a device to erase all Philip's memories of Peaceful Valley.
When Philip awakens, he has just finished filling up his car at the Peaceful Valley station. He asks for directions and drives out of town, after having a strange déjà vu experience when he sees Ellen, who has tears in her eyes.