Father Michael is a New York priest with close ties to the Mafia crime syndicate — his father is a don. The priest's brother-in-law Gino, a mafia boss, is murdered while having sex with Angela, a mistress. She narrowly escapes by hiding in a bathroom and locking the door.
Pursued by hitmen, the mistress comes to the priest for confession. She is afraid to go to the police so Father Mike agrees to meet her at her choice of location. A cab driver transports him to a loft apartment, telling him a sorrowful tale of how Angela has helped him and his wife with the grief over losing a young son. Father Mike confronts her about knowing his relationship to Gino. She denies knowing the connection. When the two encounter the hitmen, the priest is wounded and one of the hitmen recognizes Father Mike.
Angela hides in his church. She tells him it was Gino's wife who shot him. Gino is buried, and Father Mike glares across the casket at his sister Zena, having seen her with the hitmen when he was shot. He speaks to his father, who says he expects to lose at his racketeering trial and be sent to prison. The Don tells the priest that his sister wants to run the business, but he has said no since she's a woman. As they leave the cemetery, the hitman tells the Don and Zena that he recognized Michael.
Zena comes to confession and tells Father Mike that she knows of him helping the girl. The priest begins to fall in love with Angela. He meets best friend Nuzo, a detective and godson of his father. Nuzo tells him not to trust her. He tells Mike that Gino gave evidence to a rival crime syndicate, which sealed the Don's fate, in return for 5 million dollars. Nuzo tells him to sit tight while he makes an arrest, but Nuzo is gunned down, dying in Mike's arms.
Father Mike and Angela flee to Mexico, heading for her village. For the first time the priest violates his vows and they have sex. In the morning she is gone. Meanwhile, the Don finds out they are in Mexico and sends Zena to kill the girl. Father Mike races to catch up to Angela, thwarting another hitman along the way. He arrives in the village in time for a festival.
Angela is a fraud who set Gino up and took the money. She is also married to the "cabbie" she sent to pick him up. Now she instructs her husband to kill him. He stops at the festival and Michael spots him. He witnesses the cabbie drive away in the rental car Angela took.
Michael goes to the hotel and finds a surprised Angela. He lies that he loves her and they have sex again. She awakens to see Michael sitting in a chair, staring at her. He stands, walks to the door and leaves her, saying "vaya con Dios," which is Spanish for "go with God."
Angela is stunned to see Zena step through the door. Zena fatally shoots Angela as Michael continues down the steps past the body of the "cabbie." He gets into a limo and waits for Zena. She sits next to him and says "thank you, brother." He takes her hand and kisses it as they drive away.
The film was both a commercial and critical failure and caused a significant amount of controversy because of the touchy subject matter. Roger Ebert (himself raised Catholic) gave the film a "zero star" rating, writing,
This is it -- located at last and with only six weeks to spare -- the worst film of 1988. "Last Rites" qualifies because it passes both acid tests: It is not only bad filmmaking, but it is offensive as well -- offensive to my intelligence.
In America, the film grossed $427,000, making it one of the biggest box office bombs of 1988.