Fred’s chilling encounter with The Mystery Man is by far Lost Highway’s greatest scene. The entire atmosphere (setting: a house party thrown by Renee’s friend, Andy) is immediately changed by his presence. For three minutes, all aspects of David Lynch’s heightened surrealism come together in a perfect amalgamation of ambiguity, altered reality and an unparalleled ability to make the impossible seem terrifyingly real. If any scene deserves to be called “Lynchian,” this is it.
Robert Blake, in his final acting role before possibly getting away with murder, exudes a chilling, supernatural charisma. Donning white kabuki makeup and shaved eyebrows, Blake’s Mystery Man brilliantly toes the line between eerie and over-the-top. It’s an uncanny performance that absolutely steals the show.
But it’s the dialogue — and the delivery — that allows the scene to exist somewhere outside of time. Lynch and co-screenwriter Barry Gifford give The Mystery Man a level of crypticism usually reserved for inhabitants of the Black Lodge. In fact, he seems like a character borne straight out of Fire Walk with Me.
For a more in-depth discussion about Lynch’s underrated masterpiece, check out The Lost Highway Review. In the meantime, here’s a quick line-by-line analysis of The Mystery Man scene:
[**The Mystery Man’s dialogue is printed in red bold typeface. Fred’s lines are in bold italics**]
“We’ve met before, haven’t we?” The first thing the Mystery Man says as he approaches Fred is perfectly in step with the circular nature of the film. Kind of like the “Dick Laurent is dead” bookending, or Twin Peaks’ “Is it future or is it past?” quandary.
“I don’t think so. Where was it you think we met?” This introductory exchange will be repeated later in the film when Pete Dayton also encounters The Mystery Man. It furthers Lost Highway’s central focus on repetition and duality: Pete is Fred, and The Mystery Man is their common bond.
“At your house, don’t you remember?” Earlier in the film, Fred recounts a mysterious dream in which Renee’s face turns into The Mystery Man’s. In a sense, the two have met before, but Fred can’t seem to remember when, why or how (“No, I don’t. Are you sure?”). It’s also worth noting that Fred’s dream — in which Renee was being attacked — seems to be based on reality.
“Of course. As a matter of fact, I’m there right now.” In the opening scene of Twin Peaks: The Return, the Giant tells Agent Cooper, “It is in our house now.” Is he referring to The Mystery Man? Essentially, The Mystery Man is a supernatural personification of Fred’s murderous evil — he has always been at Fred’s house. Nevertheless, Fred is unaware of the situation: “What do you mean? You’re where right now?” He fears what will be said next.
“At your house,” answers The Mystery Man. Bill Pullman’s performance in Lost Highway is one of the actor’s best, his understatement allowing extremely surreal moments like this to be grounded in reality: “That’s fucking crazy, man.”
The Mystery Man pulls out a hilariously large, circa-1995 cell phone and hands it to Fred. “Call me. Dial your number. Go ahead.” Fred complies. Meanwhile, actor Robert Blake doesn’t even blink, keeping his eyes wide open the entire time he’s onscreen. His ominous stare is haunting, accentuated by the shaved eyebrows.
Astonishingly, The Mystery Man answers the call on the other end: “I told you I was here.” Fred is in disbelief. “How’d you do that?” he asks, incredulous.
“Ask me.” Things take an even darker turn, as it appears that the laws of time and space have been thrown out the window. Fred, disturbed, complies once again, speaking into the phone this time: “How’d you get inside my house?”
“[from the phone] You invited me. It is not my custom to go where I’m not wanted.” Lynch’s camera focuses on The Mystery Man smiling, tight-lipped, mouth closed, as his disembodied voice speaks from the phone. He looks like Nosferatu, and this line fittingly alludes to vampire lore.
“Who are you?” When Fred asks this, both the physical Mystery Man and the disembodied voice from the phone can do nothing but chuckle simultaneously. Demonic laughter emanates from one and the other, as it would appear that some questions are better left unanswered. “[from the phone] Give me back my phone.”
“It’s been a pleasure talking to you.” With that, The Mystery Man takes back his Motorola and disappears back into the party.

So, what the hell was that all about?
Even though The Mystery Man can be seen talking to other party guests and is identified by Andy as “a friend of Dick Laurent,” it’s clear that he’s some sort of supernatural entity. Perhaps a malevolent spirit. Or something even more abstract: a personification of Fred’s darkness within.
If Lost Highway really is just a dream within a dream inside Fred Madison’s mind, then The Mystery Man is an embodiment of Fred’s unchecked murderous jealousy. He was “invited” into the home when Fred killed his wife. And he manifested a physical appearance when Fred escaped inside his head to deny it.
The Mystery Man symbolizes the true Fred, the evil that can’t be outrun. No matter how hard he tries, he can’t escape the past. Lost Highway is Fred’s journey into accepting his inner self, for better or worse, with The Mystery Man acting as his enigmatic guide.
Just like Albert Rosenfield’s explanation for Killer BOB, The Mystery Man represents “the evil that men do.”