In 1984, ten-year-old Jason (Tre) Styles III lives with his single mother, Reva Devereaux, in Inglewood, California. After Tre gets into a fight at school, his teacher calls Reva and says that although Tre is intelligent, he is immature and lacks respect. Frightened about Tre's future, Reva sends him to live in the Crenshaw neighborhood of South Central with his father, Jason (Furious) Styles Jr., from whom she hopes Tre will learn life lessons. Furious is strict and assigns Tre chores, but he is also a caring and attentive father. In Crenshaw, Tre reunites with his childhood friends Darrin "Doughboy" Baker, Doughboy's half-brother Ricky, and their friend Chris. That night, Tre hears Furious shooting at a burglar. Furious calls the LAPD, and two officers arrive an hour later. The white officer is civil and professional, while the black officer is hostile and demonstrates self-hatred. The next day, at Chris' suggestion, Tre and his friend group go to witness a dead body, after which they are bullied by a group of older boys. Later on, Tre and Furious return from a fishing trip to see Doughboy and Chris being arrested for theft.
Seven years later, a welcome home party is held for Doughboy, now a Rollin 60s Crips member, following his recent release from prison hoping to stay out. At the party are Chris, now paraplegic due to a gunshot wound, and new friends and fellow Crip members Dookie and Monster. Ricky is now a star running back at Crenshaw High School who hopes to earn a university scholarship. He lives with his mother Brenda, girlfriend Shanice, and their toddler son. A USC recruiter visits him and informs him that he must score at least a 700 on the SAT to qualify. Meanwhile, Tre has grown into a mature and responsible teenager who hopes to attend college with his girlfriend, Brandi. Their relationship is troubled over Tre's desire to have sex, while Brandi, a traditional Catholic, wants to wait until after marriage.
Later, during a street gathering on Crenshaw Blvd, Ferris, a Crenshaw Mafia Bloods member, provokes Ricky. Everybody comes to Ricky's defense, before Doughboy confronts Ferris and brandishes his handgun, leading to an argument between the gangs. Cooler heads prevail until Ferris fires an automatic MAC-10 into the air, with everybody fleeing the area.
After they leave, Tre and Ricky are pulled over by an LAPD patrol; the lead officer, Coffey, is the black officer who responded to the burglary years earlier. Coffey holds his gun at Tre's throat, threatening him. Distraught, Tre goes to Brandi's house, where he has a breakdown. After she comforts him, they have sex for the first time.
The next afternoon, Brenda asks Ricky to run an errand, and Ricky has a fight with Doughboy, with Brenda taking Ricky's side, and berating Doughboy. Afterward, Ricky and Tre head to a nearby drugstore. As they depart, a letter is delivered with Ricky's SAT results. After leaving the store, Ricky and Tre see Ferris and the Bloods driving around and cut through back alleys to avoid them before splitting up. As they walk in separate directions, the Bloods drive close to Ricky and one of them fatally guns him down. Doughboy, who realized Tre and Ricky were in trouble when he saw the car circling the block, is distraught over Ricky's death. Doughboy helps Tre carry Ricky's bloodied corpse home. After feeling devastated, Brenda and Shanice break into tears, with the women blaming Doughboy for causing the shooting, while he tries to unsuccessfully comfort both of them. Later, Brenda sobs over Ricky's test results - Ricky scored a 710, enough to qualify for the scholarship he sought.
Angered, the remaining boys vow vengeance on the Bloods. Furious finds Tre preparing to take his gun but seemingly convinces him to abandon his plans for revenge. Moments later, Brandi and Furious catch Tre sneaking out to join Doughboy. Later, as the gang drives around the city, Tre asks to be let out of the car and returns home. Doughboy finds the Bloods at a fast-food restaurant. Monster guns down the Bloods as they flee. Doughboy exits his car and shoots Ferris and another wounded gang member dead. Later that evening, after coming home, Furious waits for Tre. The two stare at each other with no words exchanged and enter their bedrooms for the night.
The next morning, Doughboy visits Tre, understanding Tre's reasons for abandoning the gang. Doughboy knows he will face retaliation for killing Ferris and accepts the consequences of his crime-ridden life. He questions why American media "don't know, don't show, or don't care about what's going on in the hood." He says that he has no brothers after Ricky's death, but Tre embraces him, saying he has "still got one brother left."
The epilogue text reveals that Ricky was buried the next day, Doughboy was murdered two weeks later, and Tre later goes to college with Brandi in Atlanta.
