The action is narrated by Alfieri, who was raised in 1900s Italy but is now working as an American lawyer, thereby representing the "Bridge" between the two cultures.
In the opening speech Alfieri describes the violent history of the small Brooklyn community of Red Hook and tells us that the second-generation Sicilians are now more civilized, more American, and are prepared to "settle for half" (half measures) and let the law handle their disputes. But there are exceptions, and he then begins to narrate the story of Eddie Carbone, an Italian American longshoreman who lives with his wife Beatrice and her orphaned niece Catherine.
Eddie is a good man who, although ostensibly protective and fatherly towards Catherine, harbors a growing passion for her as she approaches her 18th birthday. We learn that he has not had sex with his wife for nearly three months. Catherine is studying to become a stenographer and Eddie objects to her taking a job she has been offered until she finishes her coursework, expressing a dislike for the way she dresses and the interest she is beginning to show in men. Beatrice is more supportive of Catherine's ventures and persuades Eddie to let her take the job.
Eddie returns home one afternoon with the news that Beatrice's two cousins, brothers Marco and Rodolfo, have safely arrived in New York as illegal immigrants. He has agreed to house them saying that he is honored to be able to help family. Marco is quiet and thoughtful, possessing a remarkable strength, whereas Rodolfo is more unconventional, with plans to make a career singing in America. Marco has a family starving in Italy and plans to return after working illegally for several years, whereas Rodolfo intends to stay. Although Eddie, Beatrice, and Catherine are at first excellent hosts, cracks appear when Rodolfo and Catherine begin dating.
Eddie convinces himself that Rodolfo is homosexual and is only expressing interest in Catherine so he can marry her and gain status as a legal citizen. He confronts Catherine with his beliefs and she turns to Beatrice for advice. Beatrice, starting to realize Eddie's true feelings, tells her that she should marry Rodolfo and move out. In the meantime, Eddie turns to Alfieri, hoping for help from the law. However, Alfieri tells him that the only recourse he has is to report Rodolfo and Marco as undocumented. Seeing no solution to his problem, Eddie becomes increasingly desperate and takes his anger out on Rodolfo and, in teaching him to box, "accidentally" injures him. Marco reacts by quietly threatening Eddie, showing his strength by holding a heavy chair above Eddie's head with one hand and "smiling with triumph".
A few months have passed and Eddie reaches a breaking point when he discovers that Catherine and Rodolfo have slept together and are intent on marrying. Drunk, he kisses Catherine and then attempts to prove that Rodolfo is gay by suddenly and passionately kissing him also. After a violent confrontation, Eddie orders Rodolfo to leave the apartment.
Eddie visits Alfieri and insists that the kiss has proved Rodolfo is gay and that he is only marrying Catherine for citizenship, but once again Alfieri says the law cannot help. Out of desperation, Eddie phones immigration services but in the meantime Beatrice has arranged for Marco and Rodolfo to move in with two other undocumented immigrants in the flat above. Eddie learns that Catherine and Rodolfo have arranged to marry within a week and about the two new immigrants that have moved into the building and, with both anger and fright, frantically urges Catherine and Beatrice to move them out. When immigration officials arrive and arrest Marco, Rodolfo, and the two other immigrants, Eddie pretends that the arrest comes as a complete surprise to him, but Beatrice and Marco see through this. Marco spits in Eddie's face in front of everyone and accuses Eddie of killing his starving children. Eddie tries to convince the neighborhood of his innocence but they turn away from him.
Alfieri visits Marco and Rodolfo in custody, obtaining their release on bail until their hearing comes up. Alfieri explains that Rodolfo will be able to stay once he has married Catherine but warns Marco that he will have to return to Italy. Vengeful, Marco confronts Eddie publicly on his release, and Eddie turns on him with a knife, demanding that he take back his accusations and restore his honor. In the ensuing scuffle, Eddie is stabbed with his own knife and dies, as his stunned family and neighbors stand around.
When he witnesses Eddie's death, Alfieri trembles because he realizes that, even though it was wrong, something "perversely pure" calls to him and he is filled with admiration. But, he tells the audience, settling for half-measures is better, it must be, and so he mourns Eddie with a sense of alarm at his own feelings.