The crew plays host to a group of visiting interplanetary dignitaries who are negotiating for the rights to a stable wormhole discovered by the Barzan, which could provide a valuable and efficient "bypass" through known space. Deanna Troi, overwhelmed by her duties as ship's counselor, reluctantly agrees to attend the delegations' reception. She meets Devinoni Ral, secretly a fellow empath and negotiator for one of the groups. Ral and Troi fall into an instant, passionate affair with one another.
Meanwhile, talks over the rights to the wormhole are coming to a boiling point. Resolved to achieve success and take over the rights, the Ferengi incapacitate the Federation representative, Mendoza. Captain Jean-Luc Picard selects First Officer William Riker to represent the Federation's interests.
Riker recommends that the U.S.S. Enterprise conduct an expedition into it before committing the Federation to a binding contract. Picard agrees and orders La Forge and Data to take a shuttlecraft into the wormhole. In an effort to prevent being outdone, the Ferengi send in a shuttle of their own.
Soon after, Geordi and Data determine that the wormhole is neither stable nor valuable, as they had been led to believe. They attempt to inform the Ferengi pilots of the truth, but the Ferengi ignore them. Back on the U.S.S. Enterprise, negotiations for the wormhole continue, as well as the sparks between Deanna and Devinoni. Even though she has fallen for Devinoni, Troi starts to have some second thoughts about him when he tells her in intimate confidence that he is part Betazoid and discovers he has been using his empathic abilities to manipulate the opposing delegates in the negotiations.
Devinoni deftly narrows the competition down to the Federation and his own Chrysalians. Just before Riker can obtain the wormhole rights, the Ferengi threaten to destroy the wormhole, claiming that an "informed source" has told them that the Federation has made a covert pact with the Barzan premier.
Ral takes advantage of the tension and the Barzan leader's wishes for peace to win the claim to the wormhole for his group. When Troi realizes that Devinoni staged the entire altercation to sabotage the Federation, her sense of duty forces her to betray his trust and speak out publicly. But before the Barzan premier has a chance to cancel the bargain with Devinoni and the Chrysalians, the Enterprise shuttle emerges from the wormhole and hails the ship, announcing that it is worthless. Ral then says goodbye to Troi and returns to face his employers.