In 1960, Lorenzo Anello (Robert De Niro) lives in Belmont, an Italian-American neighborhood in The Bronx, with his wife Rosina and his 9-year-old son Calogero (Francis Capra), who is fascinated by the local mobsters led by Sonny LoSpecchio (Chazz Palminteri). One day, Calogero witnesses a murder committed by Sonny in defense of an assaulted friend in his neighborhood. When Calogero chooses to keep quiet when questioned by NYPD detectives, Sonny takes a liking to him and gives him the nickname "C". Sonny's men offer Lorenzo a better paying job, but Lorenzo, preferring a law-abiding life as an MTA bus driver, politely declines. Sonny befriends Calogero and introduces him to his crew. Calogero earns tips amounting to $600 working in the Mafia bar and throwing dice, and is admonished harshly by Lorenzo when he discovers it. Lorenzo speaks severely to Sonny, returns the money, and angrily warns him to keep away from Calogero.
Eight years later, Calogero (Lillo Brancato) has grown into a young man who has been visiting Sonny regularly without his father's knowledge. Calogero is also part of a gang of local Italian-American boys, which concerns Sonny, who warns Calogero to keep away from them and focus more on his schoolwork. Later on, Calogero meets a black girl, Jane Williams (Taral Hicks), and is smitten with her. Despite the high level of racial tension and dislike between Italian Americans and African Americans, Calogero arranges a date with Jane. He asks for advice from both his father and Sonny, with the latter lending Calogero his car so he can make a good impression. Later, Calogero's friends beat up some black cyclists who ride through their neighborhood, despite Calogero's attempts to defend them. One of the cyclists turns out to be Jane's brother, Willie. Willie mistakes Calogero for one of the assailants and accuses him of beating him up when Calogero and Jane meet for their date. Calogero loses his temper over the accusation and Willie's lack of gratitude, responding by accidentally addressing him with a racial slur, which he instantly regrets. Jane, disappointed, leaves with Willie.
At home, Calogero is confronted by his father who just saw him driving Sonny's car. An argument ensues and Calogero storms out. Shortly thereafter, Calogero is confronted by Sonny and his crew, who found a bomb in Sonny's car and suspected Calogero of planning to assassinate him. Calogero tearfully proclaims how he has come to view Sonny as a father and would never hurt him, and Sonny recognizes Calogero's innocence and allows him to leave. Lorenzo emerges to defend his son and confront Sonny, but is held back by Sonny's men. The black boys egg the Italian-American boys' usual spot in retaliation for the previous beating, and Calogero's friends make a plan to strike back using Molotov cocktails. They pick up Calogero in their car and try to force him to participate, but Sonny stops the car and orders Calogero out, warning them to stay away from Calogero. Calogero catches up with Jane, who tells him that Willie had since admitted that Calogero had tried to help him from the other boys who beat him up. Jane and Calogero make amends, but Calogero suddenly remembers his friends' plans to attack Jane's neighborhood and the two rush to stop them. During the attack, one of the Molotov cocktails is thrown back into the car window, igniting the remaining bottles. The resulting crash and explosion kills everyone inside. Calogero and Jane arrive to find Calogero's friends dead, and Calogero realizes that Sonny had saved his life.
Calogero rushes back to his neighborhood and makes his way through the crowded bar to thank Sonny and inform him of what happened, but an unnamed assailant shoots Sonny in the back of the head before Calogero can warn him. Calogero later learns that the assailant was the son of the man Sonny killed in front of Calogero's house eight years earlier. At Sonny's funeral, countless people come to pay their respects. When the crowd disperses, a lone man, Carmine, visits the funeral, claiming that Sonny once saved his life as well. Calogero does not recognize Carmine until he sees a scar on his forehead and realizes he was the assaulted man whom Sonny had defended eight years ago. Carmine tells Calogero that he will be taking care of the neighborhood for the time being, and promises Calogero help should he ever need anything. Carmine leaves just as Calogero's father unexpectedly arrives to pay his respects to Sonny, thanking him for saving his son's life and admitting that he had never hated Sonny, but merely resented him for making Calogero grow up so quickly. Calogero makes peace with his father, and the two walk home together as Calogero narrates the lessons he learned from his two mentors.
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