A priest and a gangster were childhood friends, and both want to help a local gang of kids in their own way.
In 1920 Rocky picks on Laury. Rocky and Jerry try to rob a train, but only Rocky is caught and sent to reform school. Rocky commits various crimes and serves sentences. Rocky Sullivan (James Cagney) tells his lawyer James Frazier (Humphrey Bogart) not to get smart with his $100,000 while he is in prison for three years. Rocky gets out and after fifteen years finds priest Jerry Connolly (Pat O'Brien) directing his boys choir. Rocky rents a room from Laury Ferguson (Ann Sheridan). Rocky calls on Frazier and asks for his money and a cut in the rackets, getting $500 for a start. Rocky has his pocket picked by a gang of kids. Rocky uses a gun to get his money back. He sends them to buy food, and they eat in his room. Jerry comes in and suggests basketball, and Rocky gets them to play. Frazier sends men to get Rocky. Jerry referees while Rocky talks with Laury. Rocky takes over as ref and is rough.
Laury tells Rocky that her husband was killed by police. Rocky notices men following him but manages to avoid being shot in a phone booth. Rocky visits Frazier to get his money and records from the safe. Rocky has Frazier call Mac Keefer (George Bancroft) to get the money. The next day Rocky gets $100,000 from Mac by threatening to kill Frazier. Mac calls the police that Rocky abducted Frazier. Rocky puts the money in an envelope and gives it to Soapy (Billy Halop) to stash. Two detectives search Rocky's room and arrest him. Frazier tells Mac that Rocky got their records; so Mac calls the police to release Rocky. At the hide-out Rocky gets the envelope from Soapy, warns the gang not to talk, and gives them cash.
Jerry finds the gang in the pool room and urges them to go to the gym. Rocky takes Laury out to gamble and asks Frazier and Mac for 50%. Rocky then offers Laury a job there. Jerry gets $10,000 from "a friend" but gives it back to Rocky, saying why. Jerry intends to get the criminals indicted and asks Rocky not to encourage Soapy with more money. Jerry leads a reform movement. Laury pleads for Rocky with Jerry, who says he is doing it for the kids. Jerry speaks on radio. Mac suggests bumping him off; but Rocky objects. Rocky pretends to leave, hears their plans, and then shoots Mac and Frazier. Rocky flees and shoots others in a battle with the police amid tear gas. Jerry arrives and goes in to get Rocky to surrender; but Rocky takes him hostage. Rocky runs and is captured. The gang learns that Rocky is to be executed. Jerry visits Rocky at the end. Rocky is not afraid; but Jerry persuades him to act like a coward to let the kids down and end their hero worship. Rocky cries and begs before he is killed. Soapy reads the news to the gang, and Jerry confirms it.
This classic film warns against the tendency of wild youth to admire gangsters who make money by violence; but the priest and consequences make clear that such crimes often lead to prison or a violent death.