In the 1846 slum neighborhood of Five Points, Manhattan, two gangs, the Nativist Protestants, led by William "Bill the Butcher" Cutting, and a group of Irish Catholic immigrants, the "Dead Rabbits", led by "Priest" Vallon, engage in a battle to determine which faction will hold sway over the territory. During the brutal confrontation, Bill kills Vallon and declares the Dead Rabbits outlawed. Having witnessed this, Vallon's young son hides the knife that killed his father and is taken to an orphanage on Blackwell's Island.
In 1862, Vallon's son, now using the alias "Amsterdam," returns to the Five Points seeking revenge and retrieves the knife. An old acquaintance, Johnny Sirocco, familiarizes him with the local clans of gangs, all of whom pay tribute to Bill, who remains in control of the territory. Amsterdam is finally introduced to Bill but keeps his past a secret as he seeks recruitment into the gang. He learns many of his father's former allies are now in Bill's employ. Each year, Bill celebrates the anniversary of his victory over the Dead Rabbits and Amsterdam secretly plans to kill him publicly during this celebration. Amsterdam soon becomes attracted to pickpocket and grifter Jenny Everdeane, with whom Johnny is also infatuated. Amsterdam gains Bill's confidence and becomes his protégé, involving him in the dealings of corrupt Tammany Hall politician William M. Tweed. Amsterdam saves Bill from an assassination attempt and is tormented by the thought that he may have done so out of honest devotion.
On the evening of the anniversary, Johnny, in a fit of jealousy over Jenny's affections for Amsterdam, reveals Amsterdam's true identity and intentions to Bill. Bill baits Amsterdam with a knife throwing act involving Jenny. As Bill toasts Priest Vallon, Amsterdam throws his knife, but Bill deflects it and wounds Amsterdam with a counter throw. Bill then beats him and burns his cheek with a hot blade. Going into hiding, Jenny has Amsterdam chloroformed so she can treat his wounds and implores him to escape with her to San Francisco. Amsterdam, however, returns to the Five Points seeking vengeance and announces his return by hanging a dead rabbit in Paradise Square. Bill sends corrupt Irish policeman Mulraney to investigate, but Amsterdam kills him and hangs his body in the square as well. In retaliation, Bill has Johnny beaten and run through with a pike, leaving it to Amsterdam to end his suffering. When Amsterdam’s gang beats McGloin, one of Bill’s lieutenants, for praying at the local Catholic church, Bill and the Natives march on the church and are met by Amsterdam and the Dead Rabbits, along with the women and children of the Irish community and the Archbishop. No violence ensues, but Bill promises to return soon. The incident garners newspaper coverage, and Amsterdam presents Tweed with a plan to defeat Bill's influence: Tweed will back the candidacy of Monk McGinn for sheriff and Amsterdam will secure the Irish vote for Tammany. Monk wins in a landslide, and a humiliated Bill murders him. McGinn's death prompts an angry Amsterdam to challenge Bill to a gang battle in Paradise Square, which Bill accepts.
The Civil War draft riots break out just as the gangs are preparing to fight, and Union Army soldiers are deployed to control the rioters. As the rival gangs fight, cannon fire from ships is directed into Paradise Square, interrupting their battle shortly before it begins. Many of the gang members are killed by the naval gunfire, soldiers or rioters. Bill and Amsterdam face off against one another until Bill gets wounded by a piece of shrapnel. Amsterdam then uses his father's knife to stab Bill, killing him and ending his reign. Afterward, Amsterdam and Jenny leave New York to start a new life in San Francisco. Before they leave, Amsterdam buries Bill in a cemetery in Brooklyn, next to his father. As Amsterdam and Jenny leave the cemetery, the final scene of the film shows the skyline changing in a time-lapse over the next 140 years, as modern Manhattan is built, from the Brooklyn Bridge to the World Trade Center, and the cemetery becomes overgrown and forgotten.
Leonardo DiCaprio as Amsterdam Vallon
Daniel Day-Lewis as William "Bill the Butcher" Cutting (based on William Poole)
Cameron Diaz as Jenny Everdeane
Jim Broadbent as William "Boss" Tweed
John C. Reilly as Happy Jack Mulraney
Henry Thomas as Johnny Sirocco
Liam Neeson as "Priest" Vallon
Brendan Gleeson as Walter "Monk" McGinn
Gary Lewis as McGloin
Stephen Graham as Shang
Eddie Marsan as Killoran
Alec McCowen as Reverend Raleigh
David Hemmings as John F. Schermerhorn
Lawrence Gilliard Jr. as Jimmy Spoils
Cara Seymour as Hell-Cat Maggie
Roger Ashton-Griffiths as P. T. Barnum
Barbara Bouchet as Mrs. Schermerhorn
Michael Byrne as Horace Greeley
John Sessions as Harry Watkins
Richard Graham as Harvey-Card Player
Giovanni Lombardo Radice as Mr. Legree
inspired by Herbert Asbury's 1927 nonfiction book The Gangs of New York