Bud Fox (Charlie Sheen) is working as a junior stockbroker at Jackson Steinem & Co. He wants to work with his hero, Gordon Gekko (Michael Douglas), a legendary Wall Street player. After calling Gekko's office 59 days in a row trying to land an appointment, Bud visits Gekko on his birthday with a box of Gekko's favorite, contraband Cuban cigars. Impressed at his sheer boldness, Gekko grants Bud an interview. Bud pitches him stocks, but Gekko is unimpressed. Desperate, Bud provides him some inside information about Bluestar Airlines, which Bud learned in a casual conversation from his father, Carl (Martin Sheen), the union leader for the company's workers. Intrigued, Gekko tells Bud he will think about it, but also that he "[looks] at a hundred deals a day," but "[chooses] one." A dejected Bud returns to his office. However, Gekko places an order for Bluestar stock and becomes one of Bud's clients. Gekko gives Bud some capital to manage, but the other stocks Bud selects lose money.
Gekko gives Bud another chance, and tells him to spy on British CEO Sir Lawrence Wildman (Terence Stamp) and discern Wildman's next move. Bud learns that Wildman is making a bid for a steel company. Through Bud's spying, Gekko makes big money, and Wildman is forced to buy Gekko's shares off him to complete his takeover.
Bud becomes wealthy, enjoying Gekko's promised perks, including a penthouse on Manhattan's Upper East Side and a trophy girlfriend, interior decorator Darien (Daryl Hannah). Bud is promoted to a senior stockbroker as a result of the large commission fees he is bringing in from Gekko's trading, and is given a corner office with a view. He continues to maximize inside information and use friends as straw buyers to provide more income for him and Gekko. Unknown to Bud, several of his trades attract the attention of the Securities and Exchange Commission.
Bud pitches a new idea to Gekko: buy Bluestar Airlines and expand the company, with Bud as president, using savings achieved by union concessions and the overfunded pension. Even though Bud is unable to persuade his father to support him and Gekko, he is able to get the unions to push for the deal. Soon afterward, Bud learns that Gekko plans to dissolve the company and sell off Bluestar's assets in order to access cash in the company's pension plan, leaving Carl and the entire Bluestar staff unemployed. Although this would leave Bud as a very rich man, he is angered by Gekko's deceit and racked with the guilt of being an accessory to Bluestar's impending destruction, especially after his father suffers a heart attack. Bud resolves to disrupt Gekko's plans, and breaks up with Darien when she refuses to go against Gekko, her former lover.
Bud devises a plan to drive up Bluestar's stock before manipulating it back down. He and the other union presidents then secretly meet with Wildman and arrange for him to buy controlling interest in Bluestar at a significant discount. Gekko, realizing that his stock is plummeting, dumps his remaining interest in the company on Bud's advice. However, when Gekko learns on the evening news that Wildman is buying Bluestar, he realizes that Bud engineered the entire scheme. Bud triumphantly goes back to work at Jackson Steinem the following day, only to be arrested for insider trading.
Sometime later, Bud confronts Gekko in Central Park. Gekko berates him for his role with Bluestar and accusing him of ingratitude for several of their illicit trades. Following the confrontation, it is revealed that Bud has turned state's evidence and was wearing a wire to record his encounter with Gekko. He turns the wire tapes over to the authorities, who suggest that he may get a lighter sentence in exchange for helping them make a case against Gekko. Later on, Bud's parents drive him down FDR Drive towards the Supreme Court Building downtown to answer for the crimes he committed under Gekko's influence. Carl tells him he did right in saving the airline. The film ends with Bud going up the steps of the courthouse, knowing that while he is likely going to prison and his career is ruined, he now has a clear conscience.