It's the late 1960s and Frank Lucas (DENZEL WASHINGTON) is the driver for Harlem folk hero and crime figure Ellsworth "Bumpy" Johnson (CLARENCE WILLIAMS III). When the latter dies, Frank takes over the business, immediately clashing with rival crime lord Tango (IDRIS ELBA), especially when Frank decides to cut out the middleman and directly import heroin from Vietnam, thus allowing him to undercut the competition with his one-hundred percent pure product.
He becomes wildly successful, mainly by behaving like a professional businessman and employing various family members, such as his brother, Huey (CHIWETEL EJIOFOR), and moves all of them, along with his mother, Mama Lucas (RUBY DEE), from North Carolina to their own mansion. He also ends up marrying Miss Puerto Rico, Eva (LYMARI NADAL), who's drawn to the gangster's charming demeanor.
While having to deal with other criminal types such as Nicky "Mr. Untouchable" Barnes (CUBA GOODING, JR.) and Dominic Cattano (ARMAND ASSANTE), Frank also draws the attention of others who aren't pleased with his business. Among them is Special Investigation Unit cop Det. Trupo (JOSH BROLIN) who, along with other corrupt cops, takes drugs from police evidence and sells them back to local drug dealers, thus controlling and profiting from the business.
Then there's New Jersey cop Richie Roberts (RUSSELL CROWE) who's so honest and earnest that he draws the ire of his fellow cops when he turns in nearly $1 million of recovered money rather than keep it himself. Facing that, his wife Laurie (CARLA GUGINO) wanting to divorce him and move their son to Vegas, and the death of his addict partner to drugs, Richie accepts a position with the feds to form his own narcotics team and track down the source of the new heroin that's become known as Blue Magic.
With Trupo trying to put the heat on both Frank and Richie to stay out of his business, the gangster and the cop strive to do their own thing, with their paths inevitably destined to cross.