During prohibition, Chicago gangster Johnny Lovo (played by Osgood Perkins) expands his control over the beer market in his territory with the help of a young criminal, Tony Camonte (played by Paul Muni). After Camonte assassinates Lovo's boss, Lovo promotes him to second-in-command of his gang and gives him a share of the profits. As their success grows, Tony becomes increasingly ambitious and starts to desire Lovo's position and his mistress, Poppy (played by Karen Morley). In the midst of a power struggle with rival gangs over control of the North Side, Camonte uses a machine gun to kill Dorgan and his entire gang, including Gaffney (played by Boris Karloff) who is murdered in a bowling alley. Fearing for his own position, Lovo orders for Tony to be killed, but Tony escapes and orders his right-hand man Rinaldo (played by George Raft) to murder Lovo.
Afterwards, Tony establishes Poppy as his mistress and becomes the dominant figure in the city's criminal underworld. However, Tony becomes jealous when he finds out Rinaldo is in love with his sister Cesca (played by Ann Dvorak) and kills him in a fit of rage. Seeking revenge, Cesca reports the murder to the police and tracks Tony to his hideout to kill him. However, they both end up surrounded by the police and Cesca joins her brother in a final battle. Cesca is killed and Tony becomes panicked, finally being killed by the police gunfire.