Tom Reagan (Byrne) is the long-time confidant of Leo O'Bannon (Finney), an Irish American political boss who runs a Prohibition-era city. When Leo's Italian up-and-coming rival Johnny Caspar (Polito) announces his intentions to kill bookie Bernie Bernbaum (Turturro), Leo goes against Tom's advice and extends his protection to Bernie. Bernie is the brother of Verna Bernbaum (Harden), an opportunistic gun moll who has begun a relationship with Leo while having a long-term secret affair with Tom. Leo and Caspar go to war as a consequence.
Tom tries everything he can to convince Leo to give Bernie up to Caspar to end the war; he attempts to convince Leo that Verna is playing him to protect her brother, but Leo will not be swayed. After an assassination attempt on Leo, Tom reveals his affair with Verna to Leo to prove that she is dishonest, causing Leo to beat Tom up and turn his back on both. Tom then appears to change sides and goes to work for the ascendant Caspar. He is immediately commanded to kill Bernie at Miller's Crossing to prove his loyalty.