The South Boston section of Boston is run with a heavy hand by the Irish mob boss, Frank Costello (Jack Nicholson). The Massachusetts State Police Department has set up the Special Investigations Unit to collect evidence and put Costello and his men in jail. Billy Costigan (Leonardo DiCaprio) has just graduated from the state police academy, and has been assigned to infiltrate Costello's gang by the unit chief. Billy joins the mob and begins to earn Costello's trust. Around the same time, Costello's investment in a young man has paid off when Colin Sullivan (Matt Damon) successfully infiltrates the state police. Colin is assigned to the Special Investigations Unit, the same unit that is trying to take Costello down. The only problem for the police is that Colin keeps Costello informed as to what the police are about to do. Eventually, the police and the mob discover that a mole has infiltrated their ranks. Each man is living a double life where one misstep will mean life or death if he is caught.