In 1949 Los Angeles, gangster Mickey Cohen wants to control all organized crime and argues with local mobster Jack Dragna that they should not allow the East coast mafia to run the town. Meanwhile, LAPD Detective Sergeant John “Sarge” O’Mara raids a Cohen-owned brothel to save a woman from being raped, gaining the attention of Police Chief Bill Parker. Parker believes that more drastic measures need to be taken against men like Cohen, and tasks O’Mara to begin waging a guerrilla campaign against the mobsters. He tells O’Mara (a former OSS commando during World War II) to use his special operations training, learned at Camp X during World War II, and to select a small team that will work without badges or official support from the police.
O’Mara’s pregnant wife Connie suggests choosing unorthodox veterans like himself, as young high-performers would likely already be on Cohen’s payroll. With Connie’s help, O’Mara selects a small squad of cops: black street officer Coleman Harris, wiretap expert Conwell Keeler, gunslinger and sharpshooter Max Kennard, and Kennard’s Hispanic partner Navidad “Christmas” Ramirez. O’Mara also attempts to recruit his partner Sergeant Jerry Wooters, but Wooters has become lazy and complacent in his job and refuses. Wooters keeps in touch with childhood friend Jack Whalen, who provides him with information on Cohen. Wooters also meets and begins a secret relationship with Cohen’s etiquette tutor Grace Faraday.
The squad’s first mission is to bust up an illegal Cohen casino in Burbank, California, but things quickly go bad as O’Mara and Harris are captured by corrupt Burbank police who were guarding the casino. Wooters has a change of heart after witnessing the death of a young boy he had been helping out and attempts to shoot Cohen. Whalen stops him and tells him that O’Mara is going to be turned over to Cohen, prompting Wooters to rescue the men from the Burbank jail. Deciding that they need more information on Cohen’s operations, Wooters and Keeler break into Cohen’s house and place an illegal wiretap inside his TV. The men are seen sneaking out by Grace, who agrees to keep their secret. Using the information from the wiretap, the group conducts several successful raids on Cohen operations. After a particularly violent raid on a Cohen drug shipment, Keeler begins to question what they are doing but is re-assured by O’Mara. The media begins referring to the men as “The Gangster Squad”, and Cohen pushes his men to find out who they are. Keeler deduces that Cohen is building a large wire gambling business somewhere in town, and warns O’Mara that if they don’t take it out before it becomes operational Cohen will become too big for even them to stop. Keeler uses wire transmissions to locate the building, and the squad wipes it out. An enraged Cohen realizes that the Gangster Squad must be honest cops when he discovers that none of his money was stolen.
Cohen suspects that his house is bugged and begins searching for the tap. Grace overhears Cohen and fears that he knows about her relationship with Wooters. With the help of a maid, Grace escapes Cohen’s house and meets Wooters, who takes her to Whalen and tasks him with getting her out of town. Cohen finds the bug and begins feeding false information to Keeler. Cohen lures the Gangster Squad into a trap in Chinatown, but Wooters arrives in time to alert the men to the trap. While the men are distracted in Chinatown, Cohen hits several targets himself. Cohen’s bodyguard Karl Lockwood finds Keeler’s listening post and kills him while Cohen goes to Whalen’s looking for Grace. Cohen murders Whalen in front of Grace, who hides from him. O’Mara’s house is hit by a drive-by shooting, the stress of which causes Connie to give birth to their son in their bathtub.
Grace agrees to testify against Cohen for the murder of Whalen, and O’Mara uses her testimony to get a warrant for Cohen’s arrest. The squad arrives at Cohen’s hotel to arrest him and an intense firefight breaks out. Wooters and Kennard are wounded, while Cohen and Lockwood escape. O’Mara pursues them down the block, assisted by a mortally wounded Kennard and his sharpshooting skill. Kennard, with Ramirez’ help, shoots Lockwood just before he dies and O’Mara and Cohen engage in a brutal fistfight that ends with O’Mara eventually beating Cohen to his knees. As a crowd gathers, a bloodied O’Mara walks away and Cohen is arrested for Whalen’s murder.
As Chief Parker had told them, the Gangster Squad is never credited in taking down Cohen. Grace’s testimony ensures Cohen is sentenced to 25 to life at Alcatraz, where he is welcomed violently by Whalen’s friends. Grace and Wooters stay together and he stays on the force, while Ramirez and Harris become partners on the beat. Ramirez is shown patrolling with Kennard’s signature Colt Single Action Army on his hip. O’Mara quits to live a quiet life in Los Angeles with Connie and their son.
This is great fun, it isn’t the greatest film ever made, the most original or anything like that but it doesn’t waste a second and that’s the way I like it.