Abe Reles and his accomplice Bug Workman, two cold-blooded killers from Brooklyn's Brownsville district, go to the Garment District to meet with Louis "Lepke" Buchalter, leader of the organized crime mob Murder, Inc., who offers them jobs as hit men. After hiring them to kill Catskills resort owner Walter Sage for withholding slot machine profits from the syndicate, Lepke designates Emanuel "Mendy" Weiss, his assistant, as Reles' contact. Reles coerces struggling singer Joey Collins, an old friend of Sage indebted to Reles, with veiled threats, and Joey agrees to accompany him to the Catskills, where he draws an unsuspecting Sage out into the street and into Reles' murderous hands.
Upon their return to the city, Reles visits Joey at the apartment he shares with his dancer wife Eadie and coldly announces that he will kill them if they tell anyone about what happened. Aghast, she denounces him and throws him out. Later, at a soda shop, Lieutenant William Flaherty Tobin, a local police detective determined to end the syndicate's reign of terror, arrests him and takes him to the station house for questioning. When they arrive, however, Lepke's attorney Lazlo orders for Reles' release. Resentful towards Eadie, Reles returns while Joey is away and brutally rapes her. When Joey returns, the beaten and disheveled Eadie begs him to escape with her, but he declines out of fear, and she hysterically insists that he leave.
Under Lepke's direction, Reles continues his murderous campaign. One day, at the nightclub in which Eadie performs, he asks her to reconcile with Joey, before taking her to a luxurious apartment filled with stolen goods and offering it to the couple for free. A grand jury impaneled by special prosecutor Thomas E. Dewey soon convenes, forcing Lepke to hide at the couple's dwelling. Lepke soon takes control, mistreating and constantly berating Eadie. He instructs Mendy to personally kill Joe Rosen, a shop owner he had beaten for failing to pay extortion money, to prevent him from testifying. As the NYPD scours the city for Lepke, crime lord Albert Anastasia informs him that per the syndicate's orders, he must turn himself in on a reduced charge of interstate commerce crime. Lepke reluctantly consents, but rather than the two-year prison term promised by Albert, is sentenced to thirty years in Leavenworth.
District Attorney Burton Turkus takes over the crusade, enlisting Tobin's help in identifying the players. Initially cynical about his ability to withstand political pressure, Tobin eventually agrees. Lepke, concerned about being linked to Rosen's death, orders Mendy to kill the entire Brownsville gang along with Joey and Eadie. Shell-shocked from being dominated by him, she describes living with the killers to Turkus, identifying Mendy as Lepke's right-hand man and the Brownsville gang as his personal squad, and revealing that Reles will arrive that afternoon on the Baltimore train; he puts her in protective custody and goes to the train station to arrest Reles. Later, as Mendy waits menacingly outside the soda shop to kill Joey, Turkus arrives and hauls Joey into the police station, shows him photographs of Bug's murder and warns that he will be next. Upon learning of Reles' arrest, Joey visits him in jail, notifies him of Bug's death and then threatens to testify against him. Fearing incrimination by Joey, Reles relents and, over the next six days, vividly details the organization's activities, including the fact that Joey overheard Lepke order Rosen's murder.
Realizing that Joey's testimony could bring Lepke down, Turkus places Joey and Reles in protective custody at the Half Moon Hotel in Coney Island. Eadie comes there to beg Joey to cooperate, but he reluctantly declines, fearing the mob's retaliation. She tearfully slips out of the hotel, leaving her escort behind, to stroll along a darkened pier, unaware that she is being followed. Suddenly, a man springs from the shadows and strangles her to death. Later that night, an assassin infiltrates a sleeping Reles' room and tosses him out the window, then drapes a sheet from the window to make it look like he died while attempting escape. Just as Turkus' crusade seems lost, Joey avenges his wife's death by testifying against Lepke, who is then executed in the electric chair.
Lepke is sentenced to thirty years in Leavenworth instead of the promised two, and Eadie, traumatized by her experiences, helps identify the gang members, with the authorities closing in as Reles' arrival is anticipated.
The ending underscores the eventual downfall of a seemingly untouchable crime syndicate through the courage of those victimized by its violence. Justice is served not only by law enforcement but also through the testimony of survivors, signifying the unraveling of Murder, Inc.'s grip on the city. The resolution marks a victory of legal persistence over organized terror, though not without leaving scars on those caught in the crossfire.