The movie opens with Los Angeles Police Department officers engaged in a violent shootout with four masked bank robbers who have held up a bank in Lincoln Heights. Two of them are in the bank holding hostages, while the other two are engaging the cops. Being only armed with pistols, the officers are hopelessly outnumbered, as the robbers have AK-47 automatic rifles and are wearing body armor, and several are quickly shot down. With all other weaponry failing, the officers on scene call for the Special Weapons And Tactics (SWAT) unit. The SWAT unit arrives - some via helicopter, and others in a large truck. From the helicopter, SWAT officers Jim Street (Colin Farrell) and Brian Gamble (Jeremy Renner) rappel down with two other men onto the roof of the bank and begin tunneling their way down to the storeroom. A couple of SWAT snipers are deployed to the roof of a building across the street, and a third team approaches from the ground.
While Street and Gamble are infiltrating the bank, one of the two outside gunmen tries to flee in the robbers' getaway car, but is promptly taken out by a sniper with a single round to the head. The other gunman continues to engage the police until the ground SWAT unit takes him out as well. The ground unit then sends a secure phone to the two gunmen inside the bank, and Captain Thomas Fuller (Larry Poindexter) attempts to negotiate the release of hostages.
As Fuller negotiates with the hostage takers, Gamble and Street drop into the storeroom from the air vent and sneak into the lobby, to find that one of the robbers has collared a woman and is using her as a shield. In trying not to be noticed, they fail to respond to several requests from their commander Lt. Greg Velasquez (Reg B. Cathey). The hostage taker put a pistol to his hostage's head and prepares to execute her. With seconds to make a decision, Gamble fires his rifle. The bullet strikes the woman in the shoulder, wounding her, and then hits the hostage taker, killing him. The last gunman spins and tries to draw his weapon but is promptly shot dead by Street.
Fuller is furious at Street and Gamble for their reckless actions, especially since the hostage they wounded is now suing the LAPD for negligence. Fuller orders them off the SWAT team, regulating them to "cage duty" (a degrading position involving the distribution of weapons and accessories to other officers). Gamble storms off in anger and ultimately quits the force. When Street hesitates, Fuller offers him a chance to remain on SWAT if Street rats out Gamble for recklessness.
Six months later, Street is exercising out on the beach one morning before work. He is still in the gun cage, performing menial tasks for other police officers.
One day, veteran Sgt. Daniel "Hondo" Harrelson (Samuel L. Jackson) comes to the precinct and asks Street to fix his customized rifle. Street notes the custom job and is impressed.
Hondo meets with Velasquez. In the wake of a number of scathing articles criticizing the LAPD, the chief wants to reform the department. Velasquez wants Hondo to form a new SWAT unit for him to command. Velasquez offers Hondo 2 of his own officers- T.J. McCabe (Josh Charles) and Michael Boxer (Brian Van Holt). Hondo agrees to them and decides to pick out 3 more candidates from the personnel files. Captain Fuller will have the final say on who goes into this new unit.
In his time in the cage, Street invents a new weapon that he plans to patent to law enforcement elsewhere: a gigantic hook and chain designed to bring down barricades and end hostile standoffs, which he calls the "Key to the City". Hondo comes in to collect his weapon and is impressed by Street's work.
Hondo takes some of the officers out for target practice on the firing range. T.J. manages to out-shoot Hondo, but Hondo bets $200 that Street is a better shot. T.J., not feeling threatened by a "gun bunny" like Street, agrees to the challenge. They face off, and Street ends up victorious.
Meanwhile, a French mobster, Alex Montel (Oliver Martinez) arrives at Los Angeles International Airport and heads out into the city. He intends to visit his uncle's favorite restaurant, purportedly as a birthday surprise, but in reality, it's because he knows his uncle has been stealing money from the family for some time. Alex thus slits his uncle's throat and leaves the restaurant, but is soon pulled over by motorcycle cops for a broken taillight. Since the car Alex is driving is his uncles' (and there is an arrest warrant out for that name), the officers detain him for questioning and verification of his identity. Even attempts to use bribery aren't able to spring him.
Hondo recruits Street into being his driver for a day in order to go on a SWAT team recruitment run. They first investigate an officer named Deacon "Deke" Kay (LL Cool J), who is found in the middle of a foot pursuit with a suspect. Hondo intervenes and ends the pursuit early, angering Deke. But when Deke finds out that Hondo is an agent from SWAT, his attitude changes. Hondo invites Deke to study at "SWAT school."
After deciding against another candidate who's a little too soft for the rigors of SWAT duty, Hondo and Street go to speak to a police officer named Christina "Chris" Sanchez (Michelle Rodriguez), who has applied and been rejected to SWAT three times previously as women are not usually permitted to join the SWAT teams. Despite this, Hondo offers her a spot on the team.
Upon returning to headquarters, Hondo asks Street if he wants to fill the last spot on the team. Street is hesitant, knowing that Fuller is very unlikely to approve him given the incident with Gamble at the bank robbery. Street also confirms that he did not say anything bad against Gamble.
When Hondo meets with Fuller, Fuller rejects both Sanchez and Street, but Hondo refuses to back down. Fuller makes a compromise- he will accept the group for now, but if they fail the preliminary trials needed for SWAT, then Street and Hondo will both be taken off the force. Hondo agrees, confident in his group.
Training begins shortly thereafter. The new squad members get to know each other, and it's revealed that Boxer's sister was formerly involved with Street- so there is some friction between them. Hondo puts the group through several tests- including infiltration, armor, weapons, physical conditioning and long-range shooting. Despite some initial difficulties, they are soon performing admirably.
Before long, the time has come for the team's final evaluation: a simulated hostage situation set up by Fuller. The team will have to infiltrate an airplane taken over by "terrorists" (played by fellow officers armed with paintball guns) ; they will have to take back the aircraft and take out all six hijackers within eight minutes. While looking over the plane's schematics, Street realizes that there is an alternative entry point for the plane: a tiny elevator shaft which only one member of the team could fit through. Sanchez jumps at the chance. They move into the plane, and T. J. is "killed" by a paint-ball in the process. Despite this, the group takes out all the "hijackers" and sets a new record for the course in the process.
That night, the group celebrates by eating at a cafe owned by Deke's father. Hondo congratulates them, but also admits that he is not too happy that T. J. wouldn't have survived if they had been in a real operation. After a few hours of eating and drinking, most of the group heads home. Sanchez follows Street to his favorite bar and witnesses a confrontation between Street and his ex-partner, Gamble. Sanchez then invites Street to her daughter's birthday party taking place the next day.
Since the next day is Sunday, nearly all members of the new SWAT team are relaxing. T.J. is on a date, Hondo and Velasquez go out golfing, Deke goes shopping with his family, Boxer is at home with his wife watching TV (Ironically watching the 1970's program that inspired this movie). Street takes Sanchez up on her offer and is now entertaining the kids at Eliza's birthday party. But then everyone is recalled by pager to a "Polish hostage" situation, where a man has barricaded himself in a house and is randomly firing a shotgun out the window. The man also claims to have wired all the entrances with explosives. Street volunteers his grapple weapon, and the team uses it to tear down the main wall of the house, ending the standoff in seconds.
At the sheriff's department, a deputy finds some details pertaining to Alex Montel's true identity. Velasquez is notified and asks Hondo's unit to intercept and escort the prison bus carrying Alex. But Alex's gang has also learned about the transfer. Two of Alex's men disguise themselves as police officers and use a stolen police car to pull the bus over. They then climb onto the bus and shoot the deputies, before unshackling Alex. As they're about to drive off, Hondo's team arrives and engages them in a shootout. The shootout is quick, but at the end, both fake cops are killed and Alex is captured.
Montel, as it turns out, is an international fugitive wanted in over a dozen countries on charges including murder, arms dealing & drug trafficking. As Montel is being led to a holding cell, he faces a TV camera and pledges $100 million as a reward for anyone who breaks him out of jail.
Hondo's unit is preparing to evacuate Montel via helicopter when the chopper is shot down by an unseen sniper. They take Montel back inside and form a new plan- to lead the fugitive away via a motor parade. Several of Montel's men attack the vehicles, hoping to free Montel, in the process killing a motorcycle cop and injuring two other officers. But the vehicles turn out to be a decoy, and Alex is being led down a private access area into some unmarked SUV's.
Halfway through the second checkpoint, T.J. stops the car. He has decided to take Alex's offer. As they attempt to reason with him, Gamble suddenly shows up and shoots Boxer, before he and T.J. take Alex and flee into the Los Angeles Metro. As paramedics arrive to treat Boxer, Hondo and Street chase Gamble's group into the local subway station. They miss the train and hope to catch it at the next station. But Deke and Sanchez report that the train did not arrive at the station, so they give chase in the tunnels.
After nearly falling into an explosive trap set by Gamble, the team arrives outside the tunnel. At this point, Captain Fuller is furious- he suspects the entire team might be in on T.J.'s betrayal. He orders Hondo and his crew to stand down.
As they drive out, Sanchez notices a low-flying jet over the city. They decide that the jet must be Gamble's plan for evacuating Montel. Fuller has previously sent all possible reinforcements to the airports in an attempt to cut off the potential escape. Hondo & his group follow the jet, which is actually landing on a bridge rather than at the airport. Hondo gets radio confirmation that Gamble has hostages on board the airplane, and they need to stop the craft immediately to save innocent lives.
Hondo drives their car into the landing gear of the plane, crippling it. A gun battle erupts between SWAT and Gamble's team. Sanchez is hit in the shootout, receiving a minor shoulder wound. Alex makes a break for it, but Deke follows (echoing his earlier foot pursuit) and re-captures Montel.
Hondo confronts T.J. inside the plane. T.J. asks about Boxer. Hondo is hesitant, but confirms that Boxer has received treatment and will presumably survive from his injuries. T.J. pulls out his gun and shoots himself in the head, preferring death over a prison sentence.
Street chases Gamble into a train yard, where they have one last fight. Street prevails, and Gamble is decapitated by a passing train.
Fuller arrives, commending the team for their work, but pointing out that the job is not yet finished. They take a SWAT bus out to deliver Montel to the proper authorities.
As they sit on the bus, heading home, a report of a robbery in progress comes onto the police band. Hondo points out that their shift has technically been over for 12 hours. Despite this, the team agrees to mount up and head out to their next mission.