The Prizzis are a powerful family of mobsters, as devoted to their code of honor. Charley Partanna (Jack Nicholson), the principal Prizzi hit man, is not quite so honorable, at least where affairs of the heart are concerned. While attending a mob wedding, he rejects his longtime sweetheart Maerose Prizzi (Anjelica Huston) in favor of gorgeous Irene Walker (Kathleen Turner). Supposedly a tax consultant, Irene is actually a paid killer like Charley, and this endears her to him all the more. But when it turns out that Irene has betrayed the Prizzis by taking part in a Las Vegas scam, Charley finds himself faced with a dilemma: Should he kill Irene or marry her?
He concludes that marriage is the best solution and they stay happily married until a kidnapping job, assigned to Charley, goes wrong. During a joint effort on a kidnapping concerning a crooked banker, Irene is forced to kill a woman who happened to stumble upon the scene. The unfortunate woman was a Police Captain's wife.
Not long after this accident, Irene is called upon by Dominic Prizzi (the son of Don Prizzi) to kill Charley. Dominic was unaware that Irene was Charley's wife when he made the request, and Irene did not tell him. Dominic had held a grudge against Charley for being the cause behind his daughter's (Maerose) status as a dishonored member of the family. He ordered the hit after Maerose told her father that Charley forced himself on her. It was a lie, but she was trying to worm her way back into the family's good graces.
Irene ultimately informs Charley about the hit ordered by Dominic. This distressing information, coupled with the suspicous feeling he had toward Don Prizzi for wanting to make him a "Boss" secretly, convince Charley to call his father for help. His father concocts a plan to re-kidnap the crooked banker from Don Prizzi, and offer the banker back in exchange for Dominic and a set amount of money.
Before the Prizzi family can respond, Dominic is killed by a rival Family. The Don desperatly needs Charley now to become a "Boss", and Charley's father relates the news to his son. In exchange for this new appointment, Charley must let the crooked banker go free. This settlement does not sit well with Irene, as the banker is her rock solid way of getting the money back that she paid to Don Prizzi to make amends for her part in the Las Vegas scam. Charley assures her that he will talk to the Don on her behalf.