The storyline kicks off in the late 1960’s with Yung (Alex Man) and adopted brother Kwok (Andy Lau) getting involved in petty crime with Yung racking up a large debt. Their sister Wai-chu (Pauline Wong) persuades boss Chai (Chow Yun Fat) to bail them out and they begin to work for his organization. By the 1970’s they have advanced in the ranks and Wai-chu works as a housekeeper whilst having unrequited feelings for Chai. Chai is keeping an old friend Fan (Fan Mai Sheng) safe as his life is threatened by other gangs. Chu (Ko Chun-hsiung) another boss cannot understand this sense of honour and Yung is convinced to kill Fan, an act that leads both brothers to be expelled from Chai’s organization. Yung, being increasingly resentful, plots revenge on Chai and attacks on his wedding day (To Po-yee (Carina Lau) who Yung had set Chai up with despite his own love for her).
“Tragic Hero” picks up this story a decade later. Chu has made amends with Chai as they recognize the changing of the guard and are concerned with the way the newer breed act. Yung is now more ruthless than before and begins a campaign to bring down Chai that results in tragedy and betrayal. Finally, Kwok and Chai are forced to confront Yung in an explosive confrontation that will decide their fates.