During a drug bust, LAPD patrolmen Dennis Peck and Van Stretch assault a dealer and his girlfriend. Outside, fellow patrolman Dorian Fletcher shoots a man running towards him, only to discover that he was unarmed. Peck plants a knife on the body to get the distraught Fletcher off the hook. Raymond Avilla joins the LAPD's Internal Affairs Division and is assigned to investigate the drug bust with partner Amy Wallace. They learn that Stretch abuses drugs, has a history of excessive force, uses racist language even under formal IAD questioning, and may be corrupt. Stretch is also revealed to be abusive to his wife Penny, whom he suspects of infidelity, and has a subservient friendship with Peck. Avilla eventually begins to look into Peck, who is held up as an LAPD role model but whose lifestyle is hard to justify with a patrolman's salary alone. After an altercation with Peck, Fletcher agrees to help Avilla's investigation. It is gradually revealed to the audience that Peck not only has a widespread web of corruption based on extortion, favors to cops and criminals alike and complicit dealings with pimps, but also moonlights as a hitman. This latter facet is revealed when businessman Steven Arrocas offers Peck $15000 to kill his own parents and is met with an angry haggle for a higher sum. Avilla pressures Stretch to provide evidence against Peck in return for immunity from prosecution. Avilla's marriage to starts to wilt due to his increased obsession with the case, and Peck insinuates he will make advances on Avilla's wife, Kathleen. Stretch calls Penny and tells her that he will testify, unaware that Peck is having sex with her at that very moment. During a routine patrol in Huntington Park, Stretch is shot through the chest in a hit staged by Peck. Peck murders the gunman but the van used in the hit speeds away, indicating a witness to the crime. When Stretch is revealed to be alive, Peck strangles him but makes it look as though he's holding on to a dead friend when his partners arrive. Avilla and Wallace set up a sting to catch the witness, but two SWAT units arrive on the scene after the sting is leaked. Fletcher and the witness, Demetrio, are killed in the resulting shootout. As he dies in Avilla's arms, Demetrio identifies Peck as Stretch's killer. Aware that Avilla is tailing him, Peck meets Kathleen in a public place, posing as an IAD investigator and feigning worries about Avilla's wellbeing. This angers Avilla, who has an outburst at the office. He is taken off-guard in the elevator and beaten by Peck, who deceitfully boasts that he seduced and pleasured Kathleen with anal sex. Avilla then has a violent public confrontation with Kathleen, and goes on a drinking binge. The two make up the following morning when Kathleen convinces Avilla that she would have left him long before materializing any inclination to infidelity. As the IAD net tightens around Peck, they discover his wives' ample finances are handled by Penny Stretch. Van's widow refuses to cooperate with IAD but Wallace correctly guesses her affair with Peck. Breaking under pressure, Peck's wife tells Avilla and Wallace that two recent murder victims share the same surname as a Steven Arrocas who had contacted her husband. Meanwhile, Arrocas himself walks in on Peck having rough sex with his wife. Peck nonchalantly confirms that the contract killing of Arrocas' parents has been fulfilled and tries to goad Arrocas into killing his wife, but Arrocas shoots Peck in the foot instead. Avilla and Wallace show up shortly thereafter, finding the dead bodies of the Arrocases. Peck ambushes and shoots Wallace, badly wounding her, and flees. Avilla rushes home to find Peck holding Kathleen hostage. As he is beaten and shot in the leg by Avilla, Peck proudly boasts his ability to manipulate him and disingenuously ascribes his corruption and sociopathy to the need to provide for his extended offspring. Unwilling to go to prison, Peck pulls a knife out of his boot and lunges at Avilla, who shoots him dead. Avilla tries to comfort his terrorized wife.
Internal Affairs was well received by critics; review aggregator Rotten Tomatoes gives it an 88% "Fresh" rating based on 25 reviews. Janet Maslin of The New York Times said, "Internal Affairs is, for the dim movie season that is traditionally January, an unusually bright light." Internal Affairs is included in The New York Times Guide to the Best 1,000 Movies Ever Made.
Box office
The movie was a moderate success but performed better on home video.