Terry Noonan (Sean Penn) returns home to New York's Hells Kitchen after a ten year absence. He soon hooks up with childhood pal Jackie (Gary Oldman) who is involved in the Irish mob run by his brother Frankie (Ed Harris). Terry also rekindles an old flame with Jackie's sister Kathleen (Robin Wright). Soon, however, Terry is torn between his loyalty to his friends and his loyalties to others. He is actually working as an undercover cop in order to help the police break up the gang. However, he is under great pressure and finally reveals his true identity to Kathleen but she wants to have nothing more to do with him after being told by her brother, Frank, that he is an up and coming member in his gang and has already killed two people.Jackie is drinking in a bar one night when three members of a rival Italian gang enter and he ends up killing all three, feeling insulted that they are on his gang's territory. Frank is summoned to a meeting by the Italian mafia boss and is instructed to kill his brother 'who has become a thorn in both their sides.' Frank has told Jackie to lie in wait in case the meeting goes wrong and only manages to avert a war by hugging the Italian leader outside the restaurant, in full view of his gang members.Frank arranges for Jackie to collect $25,000 that evening, telling him that the Italians are actually supporting them and this is a reward. Jackie takes Terry along as his secret back up, and they wait at Pier 38. Frank arrives with his lieutentant and, while Terry is trying to phone his police sergeant (who he mistakenly told to wait at another location), Frank shoots his younger brother although Terry does not see him doing this. The police finally arrive and Terry says he is quitting as an undercover operative.At Jackie's funeral, Terry tells Frank he was at Pier 38 and also hands Frank his police badge. It is now St Patrick's Day and Frank has instructed his gang to find and kill Terry. While Kathleen is watching the St Patrick's Day parade on her own, Terry goes to the bar where Frank and his gang are drinking and, after a final shoot out, finally kills Frank. He himself is shot three times and the viewer is left not knowing if he lives or dies.