Serpico is on the trail of arms broker Raoul Christie who is illegally selling M-16s to criminals. Serpico gets caught in a department turf war when he gets Christie's man Lincoln killed; Lincoln was an informant. Serpico befriends Christie's favorite prostitute, Erica Molinas.

Serpico gathers evidence against Nagel, who owns a cargo shipping business that smuggles Serbians into the United States for a price. Serpico tries to help an illegal immigrant Serbian brother and sister, who know about the smuggling operation, from being deported.