In the early 1990s, a tractor mechanic from a northen countryside in China nicknamed Steelhead (Jackie Chan), enters Japan illegally in search of his fiancée, Xiu Xiu (Xu Jinglei). Steelhead and a bunch of other illegal immigrants came by a freighter that incidentally sunk before reaching the harbor. A local Japanese policeman discovered them and all the immigrants ran for their lives. Steelhead managed to steal some dry clothes and tracked down his brother Jie (Daniel Wu) for help. Jie helped provide food and shelter for Steelhead while looking for a job in between searching for Xiu Xiu. Jie introduced fellow Chinese immigrants and each of them helped Steelhead by showing him trades of the underworld to survive and make a living.
While working in a underground sewer to clear out garbage, Steelhead and the rest of his Chinese friends were held up by the Japanese police. Inspector Kitano was talking to Steelhead with his rough Mandarin when all the workers ran for it. Kitano attempted to arrest Steelhead, only to fall into a large sewage drain. Steelhead couldn't let him drown, he rescued Inspector Kitano and fled the scene.
Steelhead later found temporary work as a dishwasher. While washing dishes, he rescues a Chinese woman named Lily from a bunch of thieves. Lily thanks him and welcomes him to her bar, Zanaku, if he ever needed a place to relieve his sorrows.
Sometime later, while working in a restaurant with Jie, Steelhead spots Xiu Xiu as the woman of Yakuza leader Mr. Eguchi (Masaya Kato). Sadden by the fact his fiancée has left him, he spends the night with Jie, drinking and sleeping with hookers to cope. After sobering from his experience, he decided to take charge with his life by making himself a legal citizen of Japan. He approached his fellow Chinese friends to make an aggressive campaign by selling phone cards and stealing A-grade products for underground sales. After making good money, they moved onto rigging a Pachinko machine to release more balls in order to trade the gifts for cash.
After some success, Steelhead and the rest of his friends bought Jie a chestnut cart to fulfill his simple dream of selling roasted chestnuts. The group was very happy and loudly celebrated that night. Steelhead brought Lily along to introduced to his friends. All of them joked that Lily and Steelhead looked like a great couple. It was their high spirits that angered the landlord and he demanded the Chinese migrants to move out.
Steelhead offered an expensive watch to calm the landlord down and told his friends it's important to respect their ways and learn their culture to survive and avoid complications. Lily offered to help teach everyone Japanese for free in their goal for better prospects.
Jie was happy and wanted to show his success to a local Chinese girl he liked, Shizuko, but was severely beaten because the girl's father, Tak, wanted to make sure he wouldn't go near his daughter again. Steelhead went to help recover Jie's cart with his Chinese friends at Tak's establishment. While fighting, the police arrived and everyone ran for it. Steelhead tried to escape, but not without taking back the chestnut cart. Inspector Kitano caught up to him and said he won't arrest him because of his life debt to him. Kitano gave him his contact to help him as a means to return a favor.
One day, Jie was asked to help cover the Pachinko machine. Unknown to him, the place was owned by a Taiwanese triad leader, Gao. Gao discovered the very Pachinko machine that Steelhead's group tampered with and he was out to make an example of the culprit. Jie was taken to a dark alleyway, where he was tortured. Gao had his men held him down as he used a knife to cut across his face, and Jie's shovel to chop off his hand. Steelhead went to rescue Jie, but it was too late. Gao warned Steelhead and his group to never return. To make things worst, he had Jie's cut off right hand on the floor. Steelhead wanted to get Jie's hand back, but Gao threw it on the floor and repeatedly stomped on the hand. Steelhead still wanted to retrieve Jie's hand, but Gao had more armed men and they were forced to retreat.
Jie was illegal, they couldn't take him to the hospital for proper care. They bandaged him to the best of their ability and hoped for his recovery. Steelhead and his men demanded vengeance on Gao, but Steelhead insisted on patience to think things through. Steelhead watched over Jie and tried to help him, but Jie was distraught over his hand. Steelhead himself was overwhelmed with guilt, sadness, and anger over what had happened and decided to take matters into his own hands.
Steelhead snucked inside Gao's establishment for revenge, but found Gao talking to a local Yakuza, Togawa's son. Steelhead had hidden himself in one of the private rooms and overheard their arrangement. Togawa had arranged a deal for Gao to betray and murder his friend Eguchi for a sizable reward, along with the Kabuki-cho territories under his control. Gao intends to murder Eguchi later in the evening and Steelhead decided to remain hidden until the hit.
Eguchi came to visit Gao under the pretense of inspecting their profits over their investments. All the while, Gao prepared his men and himself to commit bloody murder. Just as Eguchi extended his hand for a friendly handshake, Gao attempted to slice him with his cleaver. Gao personally attempted to chop Eguchi, but Steelhead revealed himself by chopping off Gao's arm with his machete. Both men then ran for their lives and evaded capture. Eguchi managed to contact his men to safely escort them back to the Eguchi estate.
Xiu Xiu had heard her husband's attack and wanted to see his condition, only to see Steelhead beside him. Eguchi previously learned that Steelhead and his wife used to be fellow villagers and let them catch up as he changed clothes. Steelhead was surprised to see Eguchi and Xiu Xiu have a little girl, Ayako. The two had an awkward conversation, Xiu Xiu tells Steelhead she goes by the name Yuko Eguchi these days. Eguchi returned to talk and offered high paying jobs for him in return for saving his life. Steelhead refused, he reminded Yuko to contact her ailing mother and returned home. Eguchi couldn't help point out the irony of that Yuko's ex saved his life, revealing that Eguchi had figured out their relationship.
Later, Eguchi and his Yakuza group was having internal conflicts. Eguchi found out (from Steelhead) that Togawa is suspected of being the perpetrators of the failed hit. Even though everyone knew who did it, there was no solid evidence and Eguchi was told to apologize to Togawa for his insolence. Eguchi then approached Steelhead to be a hitman. He asked Steelhead to kill the head of Togawa-gumi and Sanwa-kai to remove his opposition. Steelhead agreed to the jobs under the condition he has control of Gao's territories and legal citizenship in Japan. Steelhead killed both his targets in a rough manner and caused a civil war within the Yakuza ranks, each blaming each other for the deaths of their men; both Steelhead and Eguchi got what they wanted. Steelhead is now a vassal to Eguchi (recently promoted head of Sanwa-kai). Nakajima (one of Eguchi's closest men) didn't approve the idea of Chinese controlling Chinese, but Eguchi thought it would be an interesting way to manage Gao's territory and have Togawa's fury diverted to them instead. Nakajima begrudgingly handed over Gao's territories to Steelhead.
Steelhead's plans were all for the sake of creating better living conditions for his Chinese brothers and helping incoming immigrants; Steelhead himself wasn't interested in the day-to-day operations of being a vassal and separated jobs to each of his trusted comrades to run things. He hoped all he's done would benefit everyone and happily left his responsibilities to start his tractor business with Lily. Just as Steelhead ventures outside their new HQ, Kitano arrived to talk. Kitano saw his legal Japanese citizen ID and warned him of his future actions as he doesn't want to arrest him. Kitano would return to live up to his words.
Kitano revealed to Steelhead that while he was ignorantly running his business, all of his brothers has since become corrupted. Kitano warned him that all the evidence points to him and he'll be eventually arrested along with his friends. Steelhead compromises with Kitano, evidence for the arraignment of Eguchi in exchange for his comrade's freedom. Lily wanted Steelhead to abandon everything to head off to Brazil to start over, but to Lily's dismay, Steelhead wants to save his friends and agree to help Kitano.
Steelhead and Kitano headed to his group's HQ to talk to them. Steelhead warns everyone that they're close to getting arrested and asked them to give up their criminal operation to clean themselves of guilt; the group reacted with furious opposition. Steelhead argued that he sacrificed so much for the betterment of their lives, but each of them tried argue that what they have is rightfully theirs. Eguchi also arrived to see the internal dispute.
Steelhead told his friends of the deal with Kitano and Eguchi was naturally furiously against. Kitano pulled out his gun for some order, but Steelhead fought for the pistol to avoid hurting his friends. While attempting to calm the situation, Hongkie (a comrade) stabbed Steelhead and attempted to kill him for taking away his riches. During this whole time, the Yakuza feels that Eguchi is no longer their man. The leader of the group called Nakajima to kill Eguchi. Gao, Nakajima, and Togawa's son all agreed to take down Eguchi. Gao and Nakajima teamed up to kill Steelhead's group along with Eguchi while Togawa took control of the Eguchi estate.
Nakajima and Gao attacked Steelhead and Eguchi by stoning the building. Hongkie was about to kill Steelhead when a stone flew through the window and struck him in the head, killing him. A wave of Yakuza stormed into the building to kill everyone one Eguchi's group. Everyone within the building tried to escape, but everyone was killed one-by-one. Eguchi, Steelhead, and Kitano found themselves banded together in the staircase.
Among the chaos, Steelhead manages to kill Gao and 2 other mobsters by impaling a stick through them. Eguchi tried to escape through the window (against Steelhead's warning) and was shot in the chest. Eguchi was mortally wounded, but lived long enough to give Steelhead a USB of their Yakuza operations to arraign the Yakuza.
As Kitano and Steelhead escaped out of the building, the cops arrived to assist. Steelhead escaped on his own and found Jie in a abandoned building, high on cocaine. Steelhead tried to get him to leave with him, but Jie died as Steelhead realized he was disemboweled. Steelhead then called Yuko to warn her of danger and to meet with her along with Ayako in Okobu station, but Togawa already secured the Eguchi estate and held Ayako hostage. Togawa demanded the location of Steelhead or Ayako will be killed. Nakajima and his group intercepted Steelhead and attempted to corner him to finish him off. The police also arrived in time for a shootout. Kitano and his fellow police took care of the Yakuza and managed to shoot Nakajima dead,
but Steelhead suffered a bullet wound and escaped. Kitano realized Steelhead had escaped into the sewers, the very place Steelhead saved his life earlier. Kitano tried to pull him out of the water, but Steelhead told him it was useless. Steelhead then passed the USB (from Eguchi) and floated deeper into the sewer. Before he fades beyond Kitano's sight, he told Kitano they are even.
There was no epilogue to tell what happened to the remaining characters. It's presumed Steelhead died in the sewer, Kitano used the USB as evidence against the Yakuza, and Eguchi's family survived Togawa's torment (or not). The ending shows a simpler time when Steelhead and his comrades were celebrating over Jie's chestnut cart.