At an illegal card game, a young street urchin known as Kid (played by Charlie Korsmo) witnesses a brutal massacre involving a group of mobsters named Shoulders, Stooge, the Rodent, the Brow, and Little Face. This violent act is carried out by Flattop (William Forsythe) and Itchy (Ed O'Ross), who are working for the notorious Alphonse "Big Boy" Caprice (Al Pacino). Big Boy's crime organization is ruthlessly taking control of small businesses across the city.
When Detective Dick Tracy (portrayed by Warren Beatty) catches Kid during a petty theft, he feels compelled to protect him. With the assistance of his girlfriend, Tess Truehart (Glenne Headly), Tracy temporarily takes Kid under his wing. As the plot unfolds, Big Boy forces club owner Lips Manlis (Paul Sorvino) to surrender the deed to Club Ritz, subsequently committing murder and taking Breathless Mahoney (Madonna), the stunning club singer, as his new lover.
Lips’ disappearance prompts Tracy to interrogate Big Boy’s hired guns, including Flattop, Itchy, and Mumbles (Dustin Hoffman), but Breathless, the sole witness, refrains from testifying and instead tries to seduce Tracy. With no evidence, Big Boy walks free, compelling him to recruit more criminals like Spud Spaldoni (James Caan) and Pruneface (R. G. Armstrong) into his empire. When Spud refuses to join, he meets an explosive end, increasing Tracy's determination to uncover Big Boy's scheme.
Before long, Big Boy kidnaps Tracy and makes a failed attempt to bribe him. Instead, Tracy finds himself tied to a bomb, but is saved by Kid. As Tracy wrestles with his feelings for Breathless, she agrees to testify—but only on the condition of pursuing a romantic relationship. His feelings are complicated by his loyalty to Tess, leading to a seemingly botched raid on Club Ritz which serves as a decoy for police operations against Big Boy’s empire.
The police operations make significant headway against Big Boy, though danger lurks as they learn of a plot to kill Tracy in a warehouse. While navigating this peril, a mysterious figure known only as The Blank intervenes, saving Tracy before escaping with the captured officer. Tensions rise as Tracy struggles against his growing attraction to Breathless, who makes yet another advance in an attempt to sway him.
In a twist of fate, Tess is kidnapped by The Blank and Big Boy's ally, 88 Keys (Mandy Patinkin), while Tracy is wrongly accused of murder. Amidst the chaos, with his name cleared, he teams up with Kid—now identifying himself as Dick Tracy, Junior—to rescue Tess from the clutches of Big Boy.
The climax unfolds in a dramatic showdown at Big Boy's club, where most of his men fall to police gunfire. Trapped, Big Boy attempts to escape but is thwarted by both Tracy and The Blank. In a final confrontation, the masked figure's identity is revealed to be Breathless, who dies after confessing her ambitions to control the city and sharing a final kiss with Tracy.
The plot resolves itself as Tracy clears his name and prepares to propose to Tess. Just as he begins his marriage proposal, an armed robbery interrupts, prompting him to rush off alongside Dick Tracy Jr. The narrative culminates with Tracy gifting Tess a ring, symbolizing their commitment to each other as they embark on yet another adventure in the fight against crime.
