New York, 1929, a war rages between two rival gangsters, Fat Sam and Dandy Dan. Dan is in possession of a new and deadly weapon, the dreaded "splurge gun". As the custard pies fly, Bugsy Malone, an all-round nice guy, falls for Blousey Brown, a singer at Fat Sam's speakeasy. His designs on her are disrupted by the seductive songstress Tallulah who wants Bugsy for herself.

A teenage loner pushes his way into the underworld of a high school crime ring to investigate the disappearance of his ex-girlfriend.