Fallen Angels takes place in 1968, against the backdrop of the Vietnam War. The novel follows the journey of seventeen-year-old Richie Perry, an African American private from New York City. Since graduating from high school, Perry has been feeling uncertain about what he wants to do with his life. Knowing that his single mother cannot afford college, he has decided to turn to the army for answers. On the plane to Vietnam, Perry thinks about the practical circumstances surrounding his deployment - he is going into combat due to a paperwork error - His recent knee injury should prove him to be unfit for battle, but his medical profile has not yet made it through the proper bureaucratic channels. During the long journey, Perry meets Harold "Peewee" Gates, a fellow African American private from Chicago. He also befriends Judy Duncan, an army nurse from Texas.
Upon landing in Vietnam, Perry and Peewee are assigned to Alpha Company, which is stationed in Chu Lai. They meet the soldiers who will be fighting alongside them, including Johnson and Jenkins, as well as their superiors, Lieutenant Carroll and Sergeant Simpson. Rumors of a possible truce are swirling around the barracks, and many believe that the war will be over soon. Nevertheless, Perry's squad goes out on their first patrol in the pouring rain. It is uneventful until they are 100 yards from base camp and a VC booby trap kills young Jenkins. That night, Lieutenant Carroll leads the squad in a prayer, calling Jenkins a "fallen angel warrior."
During downtime in the barracks, Perry becomes acquainted with Lobel, Brewster, and Monaco. Alpha Company's next assignment is a public relations mission to a nearby hamlet. Perry and his squad mates hand out food and medical supplies to the Vietnamese civilians while spreading the message that Communist defectors are welcome on the American side. That night, Sergeant Simpson tells Perry and Peewee that Alpha Company's commander, Captain Stewart, is vying for a promotion to major by trying to increase the company's body count. Perry starts to question the moral reasoning for the American intervention in Vietnam.
Meanwhile, Perry becomes closer to Lieutenant Carroll, whom he starts to see as a mentor, and Peewee, who eventually becomes like a brother. Lobel copes with the unpredictability of war by pretending it is a Hollywood film. Later, Captain Stewart unwittingly perpetrates Lobel's fantasy by embedding a television crew in their squad. The journalists eagerly photograph the single VC who is killed on the mission, while Perry thinks that the dead Vietnamese man looks to be the same age as his younger brother, Kenny. During the long stretches of downtime, Perry has more time to think about Kenny and their mother, a single parent and an alcoholic. He eventually contracts an unpleasant gastrointestinal illness colloquially known as "Damn Nam Jungle Rot," leading him to miss one patrol.
To make up for the missed patrol, Carroll sends Perry out on patrol with Charlie Company, which is short on soldiers. It turns out to be a harrowing experience when one of the company's platoons ends up attacking another in a case of mistaken identity. 15 American soldiers die in the friendly fire. As the holidays approach, tension hangs thick over the barracks. Perry's squad's goes out on another pacification mission to a different hamlet, and Perry wonders if the South Vietnamese civilians see him as a killer. Alpha Company later learns that another pacification mission to the same hamlet resulted in the deaths of two Americans, necessitating another (less than friendly) mission to the same place. During the ambush, Lieutenant Carroll sustains a severe injury that turns out to be fatal. Perry and the other members of Carroll's squad are absolutely devastated by his death. Perry writes the letter to inform Carroll's wife, and Captain Stewart praises him for it.
Shortly before Christmas, a rocket attack hits base camp in the middle of the night. Stewart sees this as a sign that Alpha Company needs to be more aggressive in weeding out the VC. The Vietnamese New Year (Tet) brings a brief case-fire, but the Americans have lost control of the war - the American death toll is rising and the communist forces are gaining momentum. Perry's squad faces off against a battalion of VC while out on interdiction patrol. Lieutenant Gearhart accidentally sets of a flare that exposes their position, resulting in the death of a young private named Turner. Perry writes the official letter to Turner's family, as well.
Alpha Company's next mission is to secure the village from their first pacification mission because the VC have been harassing the civilians. When they arrive, though, VC forces have already razed the village and killed most of the civilians. A VC soldier hiding in a hut nearly shoots Perry in the head. However, the man's gun malfunctions, giving Perry no choice but to shoot him in the face - his first point blank kill. It becomes clear that the VC activity around Chu Lai has increased. Sergeant Simpson fights with Captain Stewart who, as it turns out, has been volunteering Alpha Company for all kinds of dangerous missions in order to increase his body count. During another patrol, Perry and Brewster are hit badly; Brewster dies on the evacuation helicopter.
Perry's injuries are not dangerous and he heals quickly at the army hospital, where he is reunited with Judy Duncan. He is upset to learn that he will be going back into combat. When he returns to the field, Perry meets Sergeant Dongan, who has replaced Sergeant Simpson after the latter man decided to return to 'the World' instead of extending his tour of duty. Dongan is a racist and puts the African American soldiers in more dangerous positions. Johnson emerges as the de facto leader of the squad, which has now aligned with an ARVN platoon. Dongan eventually dies during a mission to secure a VC-riddled hamlet. During the same mission, the American and ARVN soldiers have to burn the dead soldiers' bodies because if they don't, the North Vietnamese will dig them up. The smell of burning flesh haunts Perry.
As the war continues to spin into chaos, the bond between Perry and his squad mates becomes deeper and more familial. Nevertheless, Perry wishes he had a wife or girlfriend waiting for him back home. During a patrol of a potentially dangerous new area, Perry and Peewee become separated from the rest of their squad and are stranded in enemy territory - in the dark. They spend the night hiding out in a VC spider hole, clinging to each other in the face of certain death. The next morning, they manage to escape, but Peewee is badly injured. They find Monaco and are able to successfully rescue him from being VC bait, but Perry is hit in the leg as the three soldiers are boarding the helicopter. Both Perry and Peewee survive their injuries and receive the news that they will be going home. The novel ends where it began - Perry and Peewee sitting together on the plane. However, they are different men now - they will never go back to those innocent, nervous soldiers they once were.