Tom Sharky, a narcotics sergeant for the Atlanta Police Department, is working on a transaction with a drug dealer called Highball. Another member of the force, Smiley, shows up unexpectedly during the sting, causing the drug dealer to run and Sharky to give chase, ultimately shooting the suspect on a MARTA bus, but only after the wounding of the bus driver. In the aftermath, Sharky is demoted to the vice squad, which is considered the least desirable assignment in the police department.
In the depths of the vice-squad division, led by Friscoe, the arrest of small-time hooker Mabel results in the accidental discovery of a high-class prostitution ring that includes a beautiful escort named Dominoe, who charges $1,000 a night. Sharky and his new partners begin a surveillance of her apartment and discover that Dominoe is having a relationship with Hotchkins, a candidate running for governor of Georgia.
With a team of downtrodden fellow investigators that includes veteran Papa, Arch, and surveillance man Nosh, referred to by Friscoe sarcastically as Sharky's "machine", he sets out to find where the trail leads. During one of the stakeouts, a mysterious crime kingpin known as Victor comes to Dominoe's apartment. He has been controlling her life since she was a young girl, but now she wants out. Victor agrees, but forces her to have sex with him one last time.
The next day, Sharky witnesses Dominoe being killed by a shotgun blast through her front door, killing her and disfiguring her face beyond recognition. Sharky has privately been developing feelings for her while viewing her through binoculars and listening to her bugged conversations. The man who shot her, known as Billy Score, is a drug addict and Victor's brother. He answers to Victor, as does Hotchkins, who is in love with Dominoe, but remains a powerless political stooge under Victor's rule.
Dominoe suddenly turns up, to Sharky's surprise, and is told that her friend Tiffany used her apartment and is the one who was mistakenly shot by Billy Score. Dominoe is convinced that if Victor wants her dead, she is going to be dead, but reluctantly leaves with Sharky to be hidden away at his childhood home in the West End neighborhood. Meanwhile, Nosh informs Sharky that most of the surveillance tapes have disappeared from the police station, leaving both of them wondering if the investigation has been compromised. Nosh is then confronted by Billy Score, who kills him off-screen.
Sharky confronts Victor at his penthouse apartment in the Westin Peachtree Plaza, and vows to bring him to justice. Victor smugly tells Sharky that Dominoe is dead and cannot testify against him, but is stunned to be told by Sharky that she is still alive.
While attempting to find Nosh at his home, two men spring an attack on Sharky, and he is knocked out cold. He awakens on a boat, where he is held captive and tortured by Smiley, who turns out to be working for Victor. Smiley informs him of the killing of Sharky's old narcotics division boss JoJo (who was run over by a car), and reveals that Nosh is dead, as well. He cuts off two of Sharky's fingers while demanding to know where Dominoe can be found. Sharky attacks and shoots Smiley, and he manages to escape. Later, Sharky turns up with Dominoe at a Hotchkins political rally, to the candidate's considerable shock. Hotchkins is arrested and taken into custody, and Victor finds out about it on the evening newscasts.
Billy Score, in an agitated state, shoots and kills Victor. Almost immediately, Sharky and other police officers arrive at Victor's penthouse in an attempt to catch Billy. He is pursued through the upper floors of the Westin, where like a ghostly apparition he appears and disappears, killing Papa and seriously wounding Arch. Billy ultimately is gunned down by Sharky, crashing through a window and plummeting to his death nearly 700 feet below. In the end, Sharky returns to his childhood home, where Dominoe is now living with him.
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