Chan Wing-Yan (Tony Leung), a police officer, goes undercover into an organized crime triad; only his direct superior, Superintendent Wong (Anthony Wong), is aware of his mission and true identity. Around the same time, Lau Kin-Ming (Andy Lau), a triad member, infiltrates the Hong Kong Police Force on the orders of a powerful gang boss, Hon Sam (Eric Tsang). Each mole has been planted by the rival organization to gain an advantage over the other side. Over the course of ten years, Chan experiences great stress from his undercover work while Lau quickly rises through the ranks in the police department.Using Morse code on a secret radio frequency (the transmitter is cleverly hidden in a plaster cast on his hand), Chan is able to relay data back to Wong that Sam is conducting a drug deal with the Thais. The money will be exchanged in an apartment, but drugs to be handed over a few miles off at sea). However, Lau alerts Sam (by sending a SMS to all the cells in the area using his private data card, instead of the police network), giving him enough time to order his minions to dispose of the evidence. After the incident, both Wong and Sam are tasked with finding the moles in their respective organization.Lau has been charged to dig out the mole in the police department by transferring him to the internal affairs department, with a promotion. Chan follows Sam when he gets the details of all the men who were with him on that night and intends to pass them to Lau for investigation. The info is exchanged in a dark theatre. Chan follows Lau, without knowing it is Lau, but Lau has a lucky escape when Chan gets a call and is distracted.Wong intends to pull Chan out of undercover work for fear of his safety. Wong doesn't know that Lau has him under constant surveillance. When Wong goes to meet Chan at the usual meeting place, Lau informs Sam. Wong manages to get Chan to escape. However, Wong is caught by Sam's men and is killed when he is thrown off a building, having refused to reveal Chan despite a beating from the gangsters.Through this incident, Lau retrieves Wong's cell phone and contacts Chan; both of them agree to foil a drug deal by Sam. The plan succeeds and many of Sam's men are arrested, while Lau betrays Sam and murders him. Everything seems to have returned to normal. However, back at police headquarters, Chan discovers that Lau was the mole and leaves immediately (he finds the papers that Sam had given Lau to help him identify the mole in the triad ranks). Meanwhile Lau finds the password for Chan's protected file from Chan (Chan doesn't know yet that Lau is the Mole), and then later deletes all records proving that Chan is a police officer.Chan sends evidence that Lau is the mole to his house (which is seen by Lau's girlfriend). Chan and Lau meet on the same rooftop where Wong was killed earlier. Chan disarms Lau and holds a pistol to his head as a rebuke to Lau's plea for forgiveness and request to remain a cop. Inspector B (Gordon Lam) arrives on the scene shortly and orders Chan to release Lau. Chan holds Lau as a hostage at gunpoint and backs into the lift, but upon moving his head from behind Chan is suddenly shot in the head by B, who then reveals to Lau that he is also a mole planted by Hon. As they take the lift down to the lobby, Lau kills B out of his desire to eradicate traces of his past, become a "good guy" cop, and end the mole hunt. Stepping out of the lift, Lau shows his identity card to the police to identify himself as one of them.Months after Chan's death, his psychiatrist Lee (Kelly Chen) (whom Chan used to frequent to keep himself from going completely Psycho) discovers records revealing Chan's true identity as an undercover police officer; B becomes a scapegoat for Lau as the real mole in the police force and the case is closed. Lau salutes Chan at his funeral. A flashback reaffirms the point at which Lau wished he had taken a different route in life.(As Mainland China and Malaysia have restrictions that villains should be punished in the end, another ending is broadcast that Lau is announced that his identity has been uncovered and is arrested as the police arrive, which would make the plots incoherent with the sequels.)