Brooklyn, New York, 1988. Bobby Green (Joaquin Phoenix), manager of the El Caribe nightclub, and his girlfriend Amada (Eva Mendes) are preparing to attend a gathering honoring Bobby’s police captain brother, Joseph Grusinsky (Mark Wahlberg). On arrival at the event, the pair’s father, Police Chief Burt Grusinsky (Robert Duvall), takes Bobby aside and talks to him with Joseph and some other officers.

Joseph informs Bobby that he’s going to head a new narcotics unit to reduce the drug flow into the city. The unit’s main target is Vadim Nezhinski (Alex Veadov), who’s been seen doing drug deals at the nightclub. Bobby, who uses his late mother’s maiden name to disguise his police connections, refuses to inform on Vadim. It is made clear to Bobby that the police are fighting a war, and sooner or later he’s going to have to choose to side with the cops or the drug dealers.

Although now suspicious of Vadim, Bobby still has great trust in Vadim’s uncle, Marat Buzhayev, who appears to have a traditional focus on family and owns the El Caribe club. Over a family dinner, Marat offers Bobby the role of manager in a second nightclub to be opened in Manhattan. While back at the club telling his trusted friend Jumbo (Danny Hoch) of the new opportunity and offering him a job in it, the police conduct a raid, led by Joseph and his narcotics team. Vadim, being their main target, is searched and a wad of cash is found in his pocket, which is then torn in half in front of him by Joseph. As one of Vadim’s men is taken away for possession of narcotics, he is warned that if he talks, his mother will be killed. Joseph assures Vadim that the man will talk and then leaves with the other cops. Marat arrives just in time to see the bust, and to see Bobby being led away after being booked and charged with possession and resisting arrest.

In the police station, Vadim’s man ensures that everyone knows he didn’t talk by slitting his throat with a hidden knife. Bobby is visited in his cell by his father, who, after expressing disgust at his son’s actions, releases him. Bobby stops by Joseph’s office on his way out and a fight ensues, which ends with Joseph telling Bobby that he never wants to see him again. That night, Joseph pulls up to the front of his house and drops some groceries next to his car. As he bends down to pick them up, a man wearing a burlap sack walks up to him and shoots him in the face. A car pulls up to pick up the shooter, and they throw a Molotov cocktail into Joseph’s car before they speed off.

At the hospital, Bobby tries to talk with Burt, but he wants nothing to do with him. Bobby is told that that the bullet entered Joseph’s cheek and exited through his jaw, and although he’ll have to stay in the hospital for a long time, he’s going to pull through.

Vadim and his associate Pavel (Oleg Taktarov) meet with Bobby in a diner to offer him a role in distributing an important new drug shipment. When Bobby questions the risks involved considering recent events, Vadim retorts that the police are a joke, and that he is the one who shot Joseph. Bobby is left with the knowledge that the Chief of Police is next to be murdered.

Bobby goes to the police station and tells his father everything. The cops want to bring Vadim down, but they don’t have any evidence against him, and Marat appears to be totally clean of the drug business. Burt’s friend Michael says that they could use Bobby to help bust him, but Burt doesn’t want another son put in harm’s way. Bobby however has other ideas, and makes a deal with Michael to wear a wire (disguised as a Zippo lighter) to his meeting with Pavel and Vadim. If he thinks that Vadim is onto him, Bobby has a codeword, “feather”, which he can say to call in SWAT backup.

Bobby goes to the club and talks with Pavel, who tells him the details of the meet, and warns Bobby that if he doesn’t come alone or he makes the wrong move, they’ll go after Amada. Bobby is taken to a drug lab and welcomed by Vadim. He is offered a sample of cocaine, which is given to him on a blade. Bobby snorts it and hides the blade up his sleeve. He is clearly nervous, causing Vadim to search him and ask why he has both a book of matches and a lighter. When Vadim starts dismantling the lighter, Bobby says the codeword of “feather”, and is attacked by Pavel when the wire is discovered. Bobby uses the hidden blade to stab Pavel in the throat, while cops raid the drug lab, killing a couple of armed workers. A cop shoots Pavel in the head, but another unfortunately mistakes Bobby as one of the criminals, and he is forced to jump out of a window to escape. Vadim tries to escape through another window, but is arrested. Bobby is put in an ambulance having injured himself in the fall, and his father shows up, furious that this was all done behind his back. He yells at other officers, asking where his son Bobby is, a remark unfortunately overheard by Vadim while he waits in the back of a police cruiser.

Four months later, Joseph’s friends and family members throw him a welcome home party. Bobby is recovering from his fall, wearing a cast around his leg. He is accompanied by police protection, along with Amada. Joseph, Bobby, Burt, and some other cops discuss Vadim being in jail and getting a lead about a new shipment of drugs in the near future. Joseph makes it clear that he doesn’t want Bobby involved anymore, and he leaves the room. Against Bobby’s will, Amada leaves the party alone and goes to her mother’s house, where she also meets Jumbo. Bobby is annoyed that Jumbo is there, as the couple’s whereabouts are supposed to be kept a secret, but is reassured that nobody knows where they are.

Two months later, Joseph is assigned to transport Vadim from jail. However, the desk clerk tells him that Vadim was transported to a hospital after suffering from chest pains. Vadim subsequently escapes with outside assistance, and Bobby and Amada must be moved in order to remain safe. Three cars are assigned to move them to their new location, with Burt in the first car, Bobby and Amada in the second, and extra cops in the third.

As they drive in the rain, the third car disappears and the remaining convoy is attacked by gunmen in another vehicle, who kill Bobby and Amada’s driver. Bobby takes the wheel and follows his father as his car is attacked. Burt is shot in the neck and has a head-on collision with another car, fatally wounding him.

The events encourage Bobby to try and join the police force, a decision which greatly upsets Amada, who fears for his safety. Bobby is sworn in as an honorary police officer for the operation against Vadim, under the condition that he will attend the training academy after the operation is complete. He returns to an empty motel, a cop telling him that Amada has left, leaving only a note. Bobby meets Jumbo in the nightclub, who lets slip that Amada had told him which motel they had been staying at prior to the ill-fated move. After questioning Jumbo outside, it is clear that he is now working for Marat, and that it was Jumbo’s information which resulted in the convoy being ambushed.

Jumbo is interrogated by the Police, and tells them that Marat is the major drug dealer, with Vadim working under him. No previous evidence was found to link Marat with the drug business because he uses his grandchildren to smuggle drugs into the country by plane. The police now know that a major drug deal they had been anticipating is occurring the next day, and from previous information obtained by tapping Marat’s phone, they can make a guess at the location.

The next day, with Joseph, Bobby, Michael and other police assembled just out of sight, Vadim and Marat meet with their buyers in a rural warehouse. As they close the deal, the police make their presence known, starting a large gunfight. Joseph witnesses the death of an officer adjacent to him and has flashbacks to his own shooting, rendering him immobile. Bobby grabs the dead cop’s shotgun and pursues Vadim, who left the now burning warehouse through a back window. Marat is arrested and the rest of his gang is shot or detained, leaving only Vadim hidden in a field of tall vegetation. All of the cops leave the field and throw flares inside to set it alight. As the cops wait for Vadim to come out, Bobby decides to go back in alone, having previously been urged to kill Vadim rather than have him arrested. Bobby shoots him in the chest, and Vadim dies within a few seconds.

Some time later, the film ends with several scenes at a police academy graduation ceremony. Joseph informs Bobby that he has decided to take a desk job, allowing him to spend more time with his family. The final scene shows Bobby on stage with Joseph and some other new graduates, where he stares into the crowd, mistaking a ceremony guest for Amanda. In the final scene, Joseph tells Bobby that he loves him, and Bobby reciprocates, showing the brothers finally at peace with one another.