The movie begins in a Chinese restaurant somewhere in Chicago with character Shelley Levene (Jack Lemmon), a veteran real estate salesman, attempting to contact a doctor for his daughter. In the phone booth next to him is Dave Moss (Ed Harris) attempting to sell properties in Rio Rancho Estates. They both go into the mens room and start complaining about the type of potential customers, or leads, they have been getting from their sales company. They exit the bathroom and Ricky Roma (Al Pacino) is successfully selling real estate to a man at the bar.
When they return to their office, a representative, a hot-tempered, arrogant businessman called Blake (Alec Baldwin, in a role written just for the movie; not in the original stage play) sent by the owners of the company they work for, Mitch and Murray, is there. He berates them over their poor sales, and announces a "contest" in which the best-selling salesman gets a Cadillac, and the worst performing salesman is fired. The salesmen themselves blame their lack of sales on the poor quality of the leads they have gotten. Blake then tells them that he has some "premium" leads for sales in a new development, the Glengarry Leads. These are buyers who are both likely to buy and able to afford the land they are selling, so getting these leads is incredibly important to all the salesmen. Blake tells them that the leads will go to the best performing salesmen, probably to Roma at first.
Shelley is so distraught with the situation that he confronts the office manager, Mr. Williamson (Kevin Spacey), about providing him with the better leads. He takes advantage of Shelley's vulnerable situation by offering to sell him the better leads at fifty dollars a piece as well as a cut of 20% of all his profits. Shelley is unable to afford the terms and is stuck attempting to sell his second-rate leads.
The movie then skips to Dave Moss and co-worker, George Aaronow (Alan Akrin), going to a local diner across town and talking about the unethical behavior of their employer, Williamson, and about their mean and ungrateful rep, Blake, over their sales work. Moss proposes that they strike back at Mitch and Murray by stealing all the Glengarry leads and sell them to Jerry Graff, a competing real estate agency, for $7,500. Moss's plan would require Aaronow to break into the office, stage a burglary, and steal all the prime leads. Aaronow wants no part of the plan, but Moss tries to coerce him, saying that Aaronow is already an accomplice simply because he knows about the proposed robbery. Aaronow continues to decline.
Meanwhile, Ricky Roma is selling real estate to a meek, middle-aged man named James Lingk (Jonathon Pryce) back at the Chinese restaurant by promising financial success in investing. Roma does not broach the subject of a real estate deal until he has completely won Lingk over with his speech. Framing it as being "an opportunity" rather than a purchase, Roma plays upon Lingk's feelings of complacency and insecurity.
The next day, the salesmen come into work to find that the office has been burglarized and the Glengarry leads have been stolen. Williamson and the police question each of the salesmen in private. It would appear that Aaronow and Moss have done it due to their nervous attitudes. As a police inspector interviews each of them one by one in Mr. Williamson's office, Roma is especially distraught because he was the only one whose successful sales record entitled him to the Glengarry leads. Everyone is in a terrible mood except for Levene who reveals that he managed to sell $82,000 in property the night before. He explains his success story to Roma who listens with great respect and happiness for his co-worker. The negative tone in the office overshadows Levene's great sell. After his interrogation, Moss leaves in disgust, only after having one explosive last encounter with Roma.
During the cycle of interrogations first with Moss, then with Aaronow, and then to Levene, Lingk arrives at the office to tell Roma that his wife has told him to cancel the deal they made the night before because they can ill afford the sale. Scrambling to salvage the deal, Roma tries to deceive Lingk by telling him that the check he wrote the night before has yet to be cashed, and that accordingly he has time to reason with his wife and reconsider. All the while, Levene abets Roma by claiming to be a wealthy investor and friend of Roma's who just happens to be on his way to the airport, and is dependant on Roma for a ride. Williamson (unaware of Roma and Levene's stalling tactic) lies to Lingk claiming that he already deposited his check in the bank. Upset, Lingk rushes out of the office, threatening to contact the state's attorney for legal action, and Roma berates Williamson for what he has done. Roma then enters Williamson's office to take his turn being interrogated by the police. Alone with Williamson, Levene, still giddy and proud of the large sale he made that morning, takes the opportunity to mock Williamson in private. Levene further yells at Mr. Williamson for costing Roma's sale commission and tells him not to make things up unless it helps with business.
Suddenly, the tables turn when Williamson firmly asks Levene: "How do you know I made it up?" In his zeal to emasculate Williamson as he has done to him several times, Levene inadvertently revealed that he knew Williamson was lying to Roma on the spur of the moment about taking Lingk's check to the bank, and that Williamson actually left Lingk's check on his desk and did not make the bank run the previous night.... something only the man who broke into the office would know. Williamson catches Levene's slip-up quickly and compels Levene to admit that he broke into the office. Levene tries laughing it off, but he eventually breaks down and admits that he indeed broke into the office because he and Moss conspired to steal the Glengary leads to sell to Jerry Groff. Apparently, Levene ended up being Moss' accomplice in the plan after Aaronow (which Levene apparently does not know about) had turned down Moss' offer. Levene explains that the current situation has made him realize that being a salesman is what he was meant to do in life. Mr. Williamson tells Shelley Levene that his "big sale" has an incredible client credibility, and that he is a terrible salesman.
Mr. Williamson tells Levene that he is finished and he will turn him into the authorities. Levene attempts to bargain with Mr. Williamson, but Williamson reveals to Levene that the buyers to whom he made the $82,000 sale earlier are in fact crazy and have no money, and that he has no interest in helping Levene with anything for the simple reason that Williamson dislikes him. The film ends as Levene walks, defeated, into Williamson's office where the police are waiting. Roma walks out of the office for lunch, and Aaronow sits alone at his desk to continue his sales calls as usual.