The film stars Michael Keaton as an honest, goodhearted man who is forced to turn to a life of crime to finance his mother's skyrocketing medical bills and to put his younger brother through law school. It also features Joe Piscopo, Marilu Henner, Maureen Stapleton, Peter Boyle, Griffin Dunne, Dom DeLuise, Danny DeVito, Dick Butkus and Alan Hale, Jr.
1935. A pet shop owner catches a young boy shoplifting a puppy. To discourage the kid from a life of crime, the owner tells a story.
1910. Young Johnny Kelly is a poor but honest newsboy in New York City. Johnny's mother, Ma Kelly, needs an operation they cannot afford. Since the execution of Johnny's father, Killer Kelly, Ma Kelly has supported Johnny and his younger brother, Tommy, who is fascinated by the law.
Johnny's fight with a local kid (Danny Vermin) attracted the notice of local crime boss Jocko Dundee, who offers Johnny a job. Seeing no honest way to earn the money for his mother's operation, Johnny agrees to work for Dundee, even though it probably means "breaking his mother's heart." He helps rob the nightclub belonging to Dundee's rival, Roman Moronie. When asked his name, Johnny coins "Johnny Dangerously", but Moronie, a malapropist of swearwords, claims he "never forgets a fargin' face."
Years pass. With Ma's continuing medical problems, Johnny goes to work for Dundee full-time. The whole neighborhood (including the Pope) knows that Kelly is really Johnny Dangerously, except for Ma and Tommy, who think he is a nightclub owner. Similarly, the gang knows nothing of Johnny's mother and brother.
Johnny comes to Dundee's headquarters to find he has taken on two new gang members: Danny Vermin and his sidekick Dutch. Danny has lived up to his potential and become a total scumbag, with a taste for using opera audiences as shooting galleries with his .88 Magnum pistol (according to Dutch, "They made it for him special." Danny then adds, "It shoots through schools!").
As the two gangs continue to war, Johnny falls for Lil Sheridan, a young showgirl new to the big city. ("Do you know your last name is an adverb?" she asks.) Eventually, Johnny becomes the boss of the Dundee gang and negotiates a truce with Moronie.
A running gag has Ray Walston playing the owner of a newsstand who is repeatedly knocked out by a pile of newspapers flung from a delivery truck. He temporarily loses one of his primary senses whenever he comes to. At various points throughout the movie, his character alternates between blindness, deafness, and amnesia.
Eventually, Tommy graduates from law school (funded by Johnny's illicit earnings), and he goes to work for the District Attorney's office, under D.A. Burr, who is on Johnny's payroll. D.A. Burr tries to sidetrack Tommy, who has become a major public figure after hearings looking into Moronie's activities. (The rival crime boss is deported to Sweden, though he protests that he's "not from there.") Meanwhile, Burr and Vermin conspire to kill Tommy. Tommy is badly injured but survives. Johnny has Burr killed, but this leaves Tommy as the new D.A.
Vermin discovers that Dangerously is the D.A.'s brother—and Tommy overhears Vermin chortling about it. Tommy confronts Johnny, who agrees to turn over the evidence against himself to the Crime Commissioner—whom Vermin killed, framing Johnny. Not only that, Vermin steals Johnny's prized cigarette/gum case!
Johnny is arrested but says the holder of the case is the guilty party. Johnny is found guilty, sentenced to the electric chair and sent to death row. But when Vermin congratulates Tommy, Tommy notices that he has Johnny's case. Ma Kelly sucker punches Vermin in the crotch, and they realize that "Johnny didn't do it."
Johnny arrives on Death Row, where he receives rock star treatment from the starstruck warden. Johnny hears word that Tommy is in danger, and plots an escape, prevailing on the warden to move up his execution. As he is taken to the chair, Johnny assembles what looks like a tommy gun from parts handed to him by inmates. He escapes in a laundry truck driven by Lil.
Johnny, by way of a wild car chase involving several layers of shelf paper, arrives at the movie theatre where Tommy is to be killed. He shoots and wounds Vermin, saving Tommy. The governor pardons Johnny as Vermin is arrested.
Back to 1935. The young shoplifter is round eyed. He is given a kitten as Johnny says "Don't forget, crime doesn't pay." The kid goes on his way. Johnny, dressed in a tux, heads off in a limo with Lil, looks at the camera and admits, "Well, it paid a little!"
The theme song "This Is the Life" was written for the film by "Weird Al" Yankovic, though for legal reasons, the song was not featured on home video releases of the film, until the DVD was released in 2002. The VHS home video version of the film featured a version of the Cole Porter song "Let's Misbehave". The music video for Yankovic's song incorporates scenes from the movie.
The film received mixed reviews, and holds a 47% on review aggregator Rotten Tomatoes. According to Mary G. Hurd, the film "is loaded with sight gags, one liners, numerous sexual jokes, and puns". But many critics found it to be a comedy which relies on sophomoric humor. According to Gwendolyn Audrey Foster, the film is both a gangster comedy and an homage to 1930s gangster films, but is perhaps too clever for a mainstream audience. According to Leigh Hallisey, the film is a parody of "old-school" gangster movies and reveals Heckerling's awareness of their conventions and stereotypes. Foster finds the comedies of Amy Heckerling to rely on "fast-paced, witty repartee and droll humor", and draws comparisons to those of Frank Tashlin and Jerry Lewis.
Martin F. Norden considers the film to be part of a trend in 1980s comedies, linking disability to humor. He notes that the film contains numerous gags of this nature. He spotlights a running gag, concerning a blind newspaper vendor played by Ray Walston. He starts out blind but a bundle of newspapers hits him on the head, causing him to regain his sight. A repetition of the accident then leaves him deaf. Another repetition restores his sight and hearing but causes him to suffer amnesia.