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The film takes place within the notoriously rough Brownsville section of Brooklyn and especially within the Van Dyke housing projects in the NYPD's sixty-fifth precinct. Three policemen struggle with the sometimes fine line between right and wrong.



The opening scene shows two men sitting in a parked car having a conversation, the man in the drivers seat, Carlo (Vincent D'Onofrio) is then shot unexpectedly in the face by the passenger (revealed to be Sal) who then robs Carlo and runs off.



Detective Salvatore "Sal" Procida (Ethan Hawke), desperate for money to feed and house his rapidly growing family, has started pocketing the money left on the table during drug raids. Deeply religious, he finds that he's in the bad place of trying to reconcile his misdeeds with his needs. The mold in the walls of his home is making his wife (Lili Taylor) ill and endangering the life of his unborn twins. And the down payment on his coveted new, bigger house is past due.



Officer Eddie Dugan (Richard Gere) is a week from retirement after twenty-two years of less-than-exemplary service to the force when he's assigned to oversee rookies in the tough neighborhoods. His life in shambles, Eddie is barely hanging on, swilling whiskey in the morning to get out of bed. His only friend is the prostitute he frequents.



Detective Clarence "Tango" Butler (Don Cheadle) is an undercover cop working the drug beat. But he tires of the kind of attention that a black man in a black car attracts, and he's been begging for a promotion and a desk job for years. He's finally offered a way out and it means betraying a close friend Caz, a known criminal (Wesley Snipes) recently released from federal prison.



Federal Agent Smith (Ellen Barkin) instructs Tango to set-up the drug deal that will assure Caz's arrest and return to federal prison. Eddie's first rookie assignment (Logan Marshall-Green) gets himself killed on his second day on the force when he requests to be assigned to work with another officer. Sal's wife goes into the hospital after an asthma attack brought on by the mold in their home. Eddie's second rookie assignment (Jesse Williams) accidentally shoots a petty drug-dealer leaving the young man deaf and the NYPD facing a public relations nightmare.



When Tango goes to warn Caz to abort their upcoming drug deal, they are ambushed and Caz is shot dead on the street, under orders from Red (Michael K. Williams), a gangster Caz had humiliated earlier in a rooftop incident. Eddie turns in his badge and visits his regular hooker, Chantal (Shannon Kane), who does not want to change her life by moving with him to Connecticut. After Agent Smith remarks that Caz's death is better than his arrest, Tango lunges at her, but is restrained by fellow agents. Tango determines to avenge Caz's death now that he knows Red ordered the hit.



That night within the Van Dyke housing projects, Eddie, Tango, and Sal converge for very different reasons. After leaving his friend and partner, Detective Ronny Rosario (Brian F. O'Byrne), Sal, alone, raids the apartment of a drug informant. After killing many of the informant's entourage and finding their stockpile of cash, Sal is shot from behind and killed by the lone remaining gangster. Meanwhile, Eddie, overcoming the urge to commit suicide, rescues a missing person (Sarah Thompson) from a basement operated sex-slave dungeon. Tango gets his vengeance from Red, but then is mistaken for a gangster and is shot dead in the street by Rosario. Only after shooting and killing Tango does Rosario realize he's shot another law officer. Rosario, still determined to stop Sal, is forced to continue his search for him, yet is further devastated when he finds the body of Sal within the building.



The closing scene shows Eddie having rescued the missing person, and an assortment of other women, and in the process having redeemed himself from the reputation he earned within the precinct of being a failure as an officer.