In 1901, Corleone, Sicily, nine-year-old Vito Andolini’s family is killed after his father insults local Mafia chieftain Don Ciccio. He escapes to New York and is registered as "Vito Corleone" on Ellis Island.
On the occasion of the 1958 first communion party for his son, Michael Corleone has a series of meetings in his role as the Don of his crime family. With Nevada Senator Pat Geary, he discusses the terms of a fourth state gaming license for the Corleones, but the two only trade insults and demand payoffs. Johnny Ola arrives to express support for Michael on behalf of Florida gangster Hyman Roth. At the same time as the Don tries to manage his depressed sister Connie and older brother Fredo, Corleone caporegime Frank Pentangeli is upset that his boss will not help him defend New York against the Rosato brothers, who work for the Jewish Roth. That night, Michael survives an assassination attempt at his home and puts consigliere Tom Hagen in charge, reassuring him of their fraternal bond.
In 1917, Vito Corleone (Robert De Niro) lives in a tenement with his wife Carmela and son Sonny and works in a New York grocery store owned by the father of a close friend. A member of the Black Hand, Don Fanucci, who extorts protection payments from local businesses, forces the store owner to fire Vito and give his job to Fanucci's nephew. As a favor to his neighbor, Peter Clemenza, Vito hides a stash of guns; in return, he is invited to the burglary of a rich apartment. His share of the loot is a plush rug, which he lays in his own living room.
In Miami, Michael tells Roth that Pentangeli was behind the assassination attempt; Michael then travels to New York where he tells Pentangeli that Roth ordered it and asks him to cooperate with his plan for revenge. Pentangeli meets the Rosatos, and their men ambush him, saying they act on Michael's orders. However, a passing policeman interrupts them, and they flee, leaving Pentangeli for dead.
Senator Geary finds himself in Fredo's brothel with a dead prostitute and no memory of how he got there; he accepts Tom's offer of "friendship" to cover up the incident.
After witnessing a rebel suicide bombing in Havana, Cuba, Michael becomes convinced of the rebels' resolve to overthrow the dictator Fulgencio Batista. Fredo brings Michael money for a deal with Roth, but instead of giving it to Roth, Michael asks Roth who put out the hit on Pentangeli. Roth is reminded of his late friend Moe Greene—dead in a spate of Corleone killings—saying, "This is the business we've chosen. I didn't ask who gave the order because it had nothing to do with business!" As they go to President Batista's New Year's Eve party, Michael tells Fredo that he knows that Roth plans to kill him as he leaves the party, and later, Fredo inadvertently reveals that he knew Johnny Ola, despite his previous denial. Michael's bodyguard strangles Ola but is killed by police before he can finish off the ailing Roth. Michael embraces his brother, revealing that he knows that he was behind the plot on his life, but the party breaks up as word spreads that the rebels are taking over. Fredo flees in the chaos. Back home, Tom informs Michael that Roth is recovering in Miami and that Kay's pregnancy has miscarried.
Three years later, two more sons—Fredo and Michael—have been born to Vito. He and his partners (Clemenza and Sal Tessio) face extortion by Don Fanucci, who demands that they let him "wet his beak" from their recent burglary or he will have the police ruin the Corleone family. Vito persuades his partners to pay Fanucci less than he asks and promises he will "make him an offer he won't refuse" as a favor to them. During a neighborhood festa, Vito meets with Fanucci and earns his respect. He then follows Fanucci, surprises him in his apartment foyer, shoots and kills him, takes back his partners' money, and escapes.
In Washington, D.C., a Senate committee investigating the Corleone family cannot find evidence to implicate Michael until a surprise witness is called, Pentangeli - who survived the attempt on his life and is under witness protection.
Vito has become a respected figure in his New York community. He confronts a landlord who doesn't know him, offering extra money to let a widow keep her apartment. The landlord says he has already leased it and becomes angry when Vito demands that he allow her to keep her dog. Later the landlord learns that he may have offended the wrong person. Terrified, he returns to assure Vito that the widow can stay, along with her dog, at a reduced rent.
Michael and Tom observe that Roth's strategy to destroy Michael is well-planned. Fredo is returned to Nevada, where he privately explains himself to Michael. He was upset about being passed over to head the family, and helped Roth, thinking that there would be something in it for him, unaware, he swears, of their plans on Michael's life. He informs his brother that the Senate Committee's chief counsel is on Roth's payroll. Michael disowns Fredo and cautions Al Neri, "I don't want anything to happen to him while my mother's alive".
Pentangeli, ensconced in FBI witness protection and ready to avenge the attempt on his life, is prepared to confirm accusations against Michael until his Sicilian brother attends the hearing at the Don's side; Pentangeli denies his sworn statements, and the hearing dissolves in an uproar. Afterwards, Michael violently prevents Kay from leaving with their children; she retaliates with the revelation that her miscarriage was actually an abortion.
Vito, together with his young family, visits Sicily for the first time since childhood. He is introduced to the elderly Don Ciccio by Don Tommasino as the man who imports their olive oil to America and who wants his blessing. When Ciccio asks Vito who his father was, Vito says, "My father's name was Antonio Andolini, and this is for you!" He then plunges a large knife into the old man's stomach and carves it open. As they flee, Tommasino is shot and injured.
Carmela Corleone dies. At the funeral, a reformed Connie implores Michael to forgive Fredo. Michael relents and embraces Fredo but stares intently at Al Neri. Roth is refused asylum and even entry to Israel. Over Tom's dissent, Michael plans his revenge. Tom visits Pentangeli and offers to spare his family, reminding him that failed plotters against the Roman Emperor took their own lives.
Connie helps Kay visit her children, but Michael closes the door on any forgiveness.
As he arrives in Miami to be taken into custody, Hyman Roth is shot in the stomach and killed by Rocco Lampone, who is immediately shot dead by FBI agents. Frank Pentangeli is discovered dead in his bathtub with slit wrists. Al shoots Fredo while they are fishing on Lake Tahoe.
On December 7, 1941, the Corleone family gathers to surprise Vito for his fiftieth birthday. Sonny introduces Carlo Rizzi to Connie. Tessio comes in with the cake, and they discuss the attack on Pearl Harbor. Michael announces he has left college and enlisted in the United States Marine Corps, leaving Sonny furious, Tom incredulous, and Fredo the only brother supportive. Vito is heard at the door, and all but Michael leave the room to greet him.
Michael sits alone by the lake at the family compound.
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