Christopher Boyce (Timothy Hutton), a young seminarian, leaves his religious studies and returns to his family home in Rancho Palos Verdes, an affluent peninsula in southern California. He reunites with his friend from childhood, Daulton Lee (Sean Penn).Daulton is a drug smuggler and dealer and is in trouble with the law. He asks Chris to partner with him in the drug business; Chris is not interested and declines.Charlie Boyce (Pat Hingle), Chris's father, pulls strings to get Chris a job at RTX, a large telecommunication company. Chris's polite nature and obvious intelligence at work bring him to the attention of executives Larry Rogers (Macon McCalman), Tony Owens (Jerry Hardin), and Eddie (Nicholas Pryor). After a security review, Chris is assigned to the Vault, a classified area of RTX that is responsible for transmitting encrypted messages among CIA agencies worldwide. Chris soon learns that he and his fellow vault employees, Laurie (Mady Kaplan) and Gene (Dorian Harewood), have free reign in their secret workspace, where they drink, play board games, and generally goof off.In the RTX vault, Chris reads some of the CIA transmissions. By reading and talking to Eddie, Chris learns that the CIA infiltrated Australian labor unions to the CIA's benefit. Chris tells Daulton that he thinks it's wrong for the CIA to get involved in the economy and politics of an ally. He suggests to Daulton that he steal top secret documents from the Vault and that Daulton deliver the documents to the Russian embassy in Mexico. Chris wants to weaken the American intelligence community.Originally, Daulton tells Chris he's a patriot and wants nothing to do with selling secrets to the Russians. However, when he is arrested for dealing by the DEA and facing serious jail time, Daulton decides to jump bail and move to Mexico, avoiding jail. Selling stolen documents will give him a revenue stream and he tells Chris he's interested.Chris photocopies classified documents related to the CIA satellites at RTX and gives them to Daulton. He tells Daulton never to reveal Chris's name to the Russians or else they will no longer need Daulton and then Daulton could be in danger.At the Russian Embassy in Mexico City, Daulton connects with a middle-aged official, Alex (David Suchet). Later, Daulton calls Chris at a pay phone with the code "My uncle says hi" which indicates that the Russians were interested in the documents.Inside his apartment, a shaken Chris calls home and speaks briefly to his mother, who is happy to hear from him and tells him she loves him but she has to run. Chris declines to talk to his father.Daulton continues to meet Alex in Mexico City in various locations, using spy tradecraft to exchange cash for documents. The Russians tell Daulton to get a special spy camera instead of using a copier to copy documents. At first, the deals go smoothly and Daulton is pleased with the cash. In the meantime, Chris meets a young woman, Lana, (Lori Singer) at a pet store. She moves in with him but Chris doesn't tell Lana what he's doing with the classified documents from RTX.Over time, Chris notices that Daulton is destabilizing. He's using heroin regularly and making mistakes, bragging at a party and telling a girl he's a spy. The Russians are getting tired of working with Daulton, because he is not delivering the satellite frequencies they desperately want.At RTX, the Vault is subject to a security inspection by the NSA with only a minute's notice. Chris, Laurie, and Gene frantically work to hide alcohol empties, sloppy work, and dope. The NSA inspector checks surfaces, phones, drawers, and other areas of the vault but finds nothing out of place except one binder. He asks Chris about it and he deflects to Gene.Chris wants to stop stealing the RTX documents and selling them, saying it's made no difference in the balance of power. Daulton, however, wants to grow the business, expand to smuggling drugs on top of documents. He tells Chris that this is his livelihood now and that if Chris refuses to supply more documents to sell, Daulton will tell Chris's father what they've been doing. Chris surprises Daulton by showing up at his hotel in Mexico City. They meet with the Russian handler, Alex, and depart to the embassy. At the embassy, Daulton, agitated, tears the room apart looking for a listening device. Alex tells Chris that he should continue to spy for Russia; he encourages Chris to go to school and then work for the government. Chris says he's not interested in any spying at all anymore and leaves with Daulton. At the airport, Daulton starts to break down, crying and saying he doesn't know who his friends are anymore. Christopher urges him to come back to the U.S. with him, but Daulton pulls himself together and remains in Mexico.At his apartment, Christopher has packed up all of Lana's belongings. He tells her to move out because he doesnt love her anymore.At RTX, Christopher takes secret photographs of the Pyramider Project, a defunct project that has little significance. He signs off from RTX as it's his last day at work. He enters his apartment, only to find his parents and colleagues have thrown him a surprise party. Christopher tells Daulton he wants to make one last delivery for $100,000. The friends agree they're finished with delivering secrets after this last one. Chris admits he was wrong, that the Russians are just as paranoid and manipulative as the U.S. Daulton tells Christopher he agrees; he's finished and he'll do jail time for his crimes if he has to. He says its too dangerous for Christopher to make the drop and travels to Mexico on his own.Daulton is denied entrance into embassy. Suddenly, he is arrested by Mexican police officers for the murder of a police officer; he is very confused and disoriented. He tries to bribe the police office arresting him but only makes the officer angrier. The police interrogate Daulton and torture him to get him to confess to the killing of a police officer. He refuses and is jailed. Eventually, he is released and given the choice of being deported to the U.S. or the Soviet Union. He chooses America.In California, Christopher is trying to reach Daulton by phone on his hotel and is unnerved when another man answers the phone in Daulton's room. He hangs up silently. At the airport, Christopher is trying to get a flight to a country that doesn't have an extradition agreement with the U.S. He sees various people looking at him and suspects they are with the police. He leaves the airport quickly. He senses they police are circling him and that he'll be arrested at any moment. Christopher finds Lana at her job at a movie ticket booth. He tells her that the police are going to ask her a lot of questions and that he really did love her.Mexican officials drop Daulton at the border, where he is immediately apprehended by heavily armed U.S. Marshalls.Christopher has taken his falcon Fawkes to an open field. He removes her jesses and tells her she's free. He watches as she spirals up in flight, then stops on a high branch. At that moment, multiple police vehicles arrive and arrest Christopher, calling him a traitor and knocking him roughly on the ground. Chris goes willingly, watching Fawkes.Christopher is debriefed by FBI agents in a government room. He stays composed and tells the truth over multiple days of interrogation. "What was once a legitimate intelligence gathering agency is now being misused to prey on weaker governments," he says by way of explanation. He thinks back to the day he left the seminary.At the Boyce home, Larry Rogers from RTX is talking about Christopher's case with Charlie Boyce, who tells Larry he doesn't want any favors made for his son.Christopher and Daulton are in shackles as they are brought from their sentencinl. Their parents watch as Chris and Daulton walk, chained, down a long hallway. We see images of the boys during their Confirmation and high school graduation ceremonies. Fawkes flies free in a perfectly blue sky.Andrew Daulton Lee was found guilty and sentenced to life imprisonment. Christopher Boyce was found guilty and sentenced to 40 years imprisonment.