The movie is essentially a pared-down, cleaner version of the book.
The action of the book takes place from 1950 until 1958, with the initial heroin theft occurring in 1950, Bloody Christmas in 1951, the Nite Owl Massacre in 1953, and the ultimate revelation of the true motives behind the murders in 1958. In between, each of the main characters become involved in a number of subplots, several of which tie-in to the main action of the story.
Multiple dark, potentially off- putting elements were removed in adapting the book to the screen. Most notably, the Fleur-de-Lis pornography plays a much larger role in the book, and control over its distribution proves to be the ultimate motive behind the Nite Owl massacre. The pornography depicts not only "arty" sex scenes but also incest between a prostitute and her son, and most notably, a series of orgies which have been photo doctored so that the participants appear to have been dismembered.
Multiple subplots are also considerably darker than what ended up in the film: one involves a case that Ed's father worked in the 1940s involving a pedophile who kidnapped and murdered children in order to create a winged "Frankenstein" child using severed bird wings. Another involves Bud White trying to capture a serial killer who beats prostitutes to death and then engages in necrophiliac sex with their corpses.
In the novel, Ed and Jack are significantly darker than in the film: Ed Exley was a deserter during WWII, but was never caught because his entire squad died in combat and he claimed to be the sole survivor after being found. His father, Preston, is still alive and is a cop-turned-real estate mogul. It is under Preston's tutelage that Ed becomes a cruel, politically-minded police officer who only solves crimes for glory and because his father taught him the principal of "Absolute Justice," a zero-tolerance approach to law enforcement. There is no "Rollo Tomasi" story, and it is Ed's brother who was killed by a purse snatcher. Ed begins dating Inez Soto after the capture of the Night Owl Suspects, and she ultimately goes to work for his father and Raymond Dieterling, a Walt Disney pastiche whose dark past figures heavily in the novel's climax.
Jack Vincennes is a recovering drug addict who accidentally murdered a married couple during a stakeout because he was high and mistook them for criminals he was pursuing. Over the course of the book he becomes addicted to the violent pornography he is investigating and finds himself unable to fantasize about sex without it involving multiple women and severed body parts. The only hint of this side of Vincennes' personality might be seen in the scene where he pockets the small bag of marijuana that Matt and Tammy had.
The climax of the book are a pair of shootouts, one in a deli and one that occurs during a siege on a train transporting prisoners. Jack Vincennes is present for the latter and dies trying to help Ed and Bud prevent prisoners from escaping. The film's climactic shootout at the Victory Motel actually occurs in the book's prologue and ends with the death of Buzz Meeks; Dudley Smith actually survives the book and goes on to be the antagonist of the novel "White Jazz," which ends with Dudley being confined to a nursing home after he is attacked with an axe and rendered mentally retarded.