The film opens with a statement that the film is an indictment of gang rule and a call to the individual to do something about it since the government is your government. On 22nd Street in Chicago, a gentleman is cleaning up a club where some men who are hanging out are discussing the fact that Johnny Lovo is looking for some action on the south side. This man is "Big Louis" who has done well for himself. He makes a phone call in a phone booth. A shadowy figure comes in from the right and guns him down, wipes his gun and leaves. The man cleaning up the club puts on his jacket and leaves to avoid any complications.
A newspaper editor is putting out a story that "Big" Louis Costello has been killed, and that this is the beginning of a gang war. He was the last of the older generation of gangsters. He wants "gang war" in the lead copy.
Some cops (led by Guarino) (C. Henry Gordon) come to a barbershop. and the barber hides a man's gun under a towel. The man, Tony Camonte (Paul Muni), makes sarcastic jokes with the police and lights a match off of the policeman's badge as a sign of disrespect. The cop punches him and places him under arrest. Down at the police station someone reads off Tony's police record, showing us that Tony Camonte is currently strong arm for Louis Costilo (Harry J. Vejar). Johnny Lovo split with "Big" Louis. Tony was seen with Johnny Lovo (Osgood Perkins) in a barber shop and what was he up to? He is released on habeus corpus by his lawyer, Fleming. He then visits Johnny Lovo. Johnny Lovo has a girlfriend named Poppy (Karen Morley) who is flippant with the two men. Johnny gives Tony some cash and tells him he's in for a raise as they move in on the south side. Tony want's to move in on O'Hara, a big deal on the north side but Johnny tells Tony to forget about having ideas of his own and to forget the north side. Johnny wants to wait until after Louis' funeral to have a meeting about running beer on the south side.
Tony is paying someone off for an easy job about listening to a gun go off. He expresses disrespect of Johnny Lovo, and claims he will run the whole thing himself someday. He isn't intimidated by the north side, after all, why didn't they take out Big Louis first? there's only one rule; "Do it first, do it yourself, and keep on doing it"
Tony is eating dinner at home. He is not happy his sister Cesca (Ann Dvorak) is not home. He then catches her making out with a guy inside the front door. He doesn't approve of her hanging out with guys, and offers her cash to have some fun with. She delightedly accepts, but mother warns her that Tony gives nothing away for free, the money is bad, and she will eventually get mixed up in some of Tony's business. She tells her mother not to worry, and that she will run her own life and be ok. She flips some money to a barrel organ player with a monkey on the street.
Tony and Johnny and crew smash their way into dead Louis' club and take over. The start shaking down the local speakeasy and pigden joints and overselling their beer and telling them not to worry about Meehan and Berzini. There's a shootup at "the Shamrock". where presumably they took care of Meehan and Berzini. This should lock up the south side. But the newspaper indicates Meehan will live. They go to the hospital with flowers and gun down Meehan.
A prop calander indicates the passing of a few months. Tony hits on Poppy again. She is charmed, but tells him to go get a girl. Johnny is mad that Tony took out a north side place because O'Hara is likely to come out and kill them. Just then on the street "Keech" is thrown out of a car with a message to "Stay out of the north side" pinned on him.
Back at Tony's house, Camonte's dim-witted "secretary" or right hand man is putting on a hat, gets a call but doesn't get the name of who called. He banters with Tony about his inability to get the name of the caller. He gets a call again and it is not clear who it was. A man comes in with a carnation implying that he has done something to someone at a flower shop. The intercom buzzes, the dumb secretary again does not get the name. Tony takes it, it turns out to be Poppy who is waiting to come in. Tony removes the carnation to remove any connection to the flower shop hit. The man leaves and Poppy comes in. He gives the carnation to Poppy who says O'Hara was killed in a flower shop in the morning. He shows her his place with steal shutters. She notices he has an expensive bathrobe on. He's got a pile of shirts so he only wears a shit once a day. He's got a mattress with inside springs. He brags about a sign outside "Cook Tours - The World is Yours" and says someday the world will be his. Tony makes a move on Poppy but is interrupted by the announcement of the arrival of the cops. He sends Poppy down a secret exit and sets up a date on 4th street for when he is done with the cops. Guino Renaldo (George Raft) comes in. Tony instructs him to get a message to the lawyer to get him out on habeus corpus again.
Meanwhile, a British crime lord named Gaffney, (Boris Karloff) is plotting against Tony. He has just gotten an overseas shipment of Thompson sub-machine guns. One of his men calls in to say he is being tailed and Gaffney plots to get the guns moving. Tony has gotten out of the police station and goes to the restaurant. A call comes into the restaurant for Tony which the dim-witted secretary goes to get - then, in a slapstick way he is still on the phone as the restaurant he is at is plastered with bullets from drive by cars. Somehow, he is unscathed.. Tony gets his hand on a machine gun that was lost by someone in the drive by and he sees that you can carry it and sees that it could be useful. He goes to a gang hideout, orders three cars, gets into a fight with Johnny and demonstrates the machine gun. He goes and makes hits on the north side people.
The cops complain there's no law against making machine guns, just owning them. They decide to harass a warehouse where they think the machine guns are coming in. There are more hits with car accidents resulting - women screaming, chaos etc. (This is supposed to be on Valentine's day, a reference to the real life 1929 St. Valentine's Day Massacre.)
He shoots seven men execution style. The cops have picked up Gafney who is amazed to see the seven bodies. A reporter finds Gafney in his hideout. Meanwhile the cops discuss how horrible the public's attitude to gangsters is, always being glorified. The cops try talking to the editor to keep gang violence out of the paper or otherwise complaining that the paper contributes to the problem. The editor defends the headlines and the editor makes an impassioned plea to the crowd in his office, presumably city hall types, that laws need to be passed or made tougher in order to change things and that it's in the hands of the people to fix the situation.
Tony is with his men at a play where he takes an interest in Sadie Thompson, the main character in a play he is watching. He goes out for a smoke. There is one act left in the play but Tony's men have found Gafney down at the bowling alley and believe it's a setup. He reluctantly agrees to go deal with Gafney. Tony gives instructions for the hit down at the bowling alley as the secretary gets back with news about the 3rd act. Sadie ended up with the marine. Gangs of men begin to crowd around in the bowling alley and as Gafney tosses a bowling ball down the lane, machine gun fire cuts him down.
Back at the Paradise nightclub, Tony and his men arrive. He spots Poppy having dinner with Johnny. He gets a chair pulled up. They both try and light Poppy's cigarette. Gunshots ring out in a scuffle a few tables away. It doesn't phase Tony at all - he's used to "noises". Tony's sister hits on Guino Renaldo. She does a seductve dance to entice him to dance with her but he still wants to stay away since she is Tony's sister. She goes with someone else. Tony steals Poppy out on to the dance floor from Johnny. Tony spots his sister on the floor with some guy and knocks him out. He takes her home and he has an argument where she indicates "I'll do what I want". It escalates. He hits her. Cesca runs into her mother's arms. The mother, who has a moral conscience, takes her upstairs to console her. Tony, who might actually feel guilty goes outside.
As he gets outside, there is machine gun fire. He makes it to a car to escape but is followed. There is a car chase with a haze of bullets. He is gain unscathed. They go for his tires. and both cars go over an embankment. Tony has escaped to a store (Pietro's) where a man in the dark gives him some nickles to make calls for Renaldo or Lovo back at the club but they have left. He finds Renaldo with one of his girlfriends. He's suspicious Johnny Lovo put out a hit on him. He sets up a scheme where Pietro is going to call him while he is in his office claiming to be one of the guys who saw Tony get away and somehow this will give him away. This is presumably because the assumption is that Johnny wouldn't have known what members of the crew were out so he when he ducks the phone call in Tony's presence, it will give him away. It goes down as planned. After a confrontation, Johnny pleads for his life but Tony leaves having Renaldo shoot him.
Tony goes to Poppy's place. He tells her about Johnny and asks her to pack her things. He points to "Cook's Tours - The World is Yours" again. Tony's sister visits Guino in Tony's office. She talks him into having a relationship because Tony will be away for a month. Tony takes Poppy to Florida for a month.
Tony comes back from Florida. Comments are made that it's a different town then the one he left a month ago and the crowd at city hall is looking to bust him. He finds out from his mother that his sister has a place of her own and a boyfriend. Tony goes to her new place enraged.
Cesca is singing what appears to be "The Wreck Of The Old 97" (a hit record back around the time this film was made). She and Renaldo are expressing their love for each other when Tony comes in sees Guino Renaldo and shoots him. His sister, Cesca, sobbing hysterically, explains that she really loved him and they were married yesterday. She screams that he is a butcher who kills everyone and he leaves.
An order comes in for the police to arrest Tony for the killing of Guino. (The original ending starts here) The cops arrive, they shoot the secretary as he stumbles upstairs and takes a phone call while wounded. It's Poppy. He got her name, (the first time he has succeeded in getting anyone's name) and then dies. Tony mutters "I didn't know.. I didn't know.." while he holds the phone as a reference to his sister's marriage.
Tony is holed up in his steel windowed fort and his sister comes in with a gun, poiting it at him intending to kill him. Law enforcement arrives with sirens blaring and Cesca instantly changes her mind and pleads for Tony to get away as she stops aiming the gun at him. They have a bonding moment. Tony goes into a maniacal rant that they will take them all on as he loads up a Tommy machine gun and fires outside, hiting a number of policemen and sharpshooters across the street. Stray gunfire hits Cesca in the back and she falls wounded. She pleads for Tony to hold her but it turns out he is afraid of her leaving him alone. She is disgusted that he is afraid to be alone and mutters "Guino, Guino" in her final moments.
Just the, the police fire tear gas cartriages into the building. Tony shouts for his sister as the cops, lead by Guarino, break down the front door. Tony stumbles downstairs and aims the gun at them but they shoot first. Tony loses his gun, being shot on the hand and pleads his case to Guarino for a sort of mercy, they try to handcuff him but he runs for it outside and dies in a hail of bullets. Tony Camonte lies dead on the sidewalk when the image pans up from his body to the sign "The World is Yours" and the movie ends.
In this version, shot to get around censors but eventually abandoned by Howard Hughes, a line between Tony and Cesca is cut, the brother/sister bonding is reduced slightly, and he is successfully handcuffed instead of dying outside in a hail of bullets. The judge reads his sentence. He is found guilty of one murder but he has done hundreds. The judge presents a sort of sermon against violence. He is given the death penalty. A quick scene of the sand bag for being tested for the hanging is shown. Tony is brought in, his legs tied together. A bag is placed over his head. the order for the trap door is given, and he hangs off-screen.