A group of rogue U.S. Force Recon Marines, led by disenchanted Brigadier General Frank Hummel and his adjutant Major Tom Baxter, seize a stockpile of deadly VX gas–armed M55 rockets. The next day, Hummel and his men seize control of Alcatraz Island and take several tourists hostage. Hummel threatens to launch the rockets against San Francisco unless the government pays $100 million from a military slush fund, which he will distribute to his men and the families of Recon Marines who died on clandestine missions under his command and whose deaths were not compensated.
In Marin County, two gas company men are lured by a scantily-clad woman to a remote spot in Mill Valley and killed by Bobby Maxwell (DeVeren Bookwalter). Maxwell's gang, the People's Revolutionary Strike Force (PRSF), plans to use the gas men's uniforms and van as part of an ambitious series of crimes that will make them rich.
On January 18, 1960, Frank Morris (Clint Eastwood) arrives at the maximum security prison Alcatraz, having been sent there after escaping from several other prisons. He is sent in to meet the warden (Patrick McGoohan), who curtly informs him that no one has ever escaped from Alcatraz. Eventually he meets his old friends, bank robber brothers John and Clarence Anglin (Fred Ward and Jack Thibeau), and he makes the acquaintance of the prisoner in the cell next to his, car thief Charley Butts (Larry Hankin). Morris befriends numerous other inmates, including English (Paul Benjamin), a black inmate serving two life sentences for killing two white men in self-defense; the eccentric Litmus (Frank Ronzio) who keeps a pet mouse and calls himself Al Capone, and the elderly artist and chrysanthemum grower Doc (Roberts Blossom).
As a 17-year-old orphan, Henri Young (Kevin Bacon), steals $5.00 from a grocery store to feed himself and his little sister, both of whom are destitute. He is apprehended by the store clerk, and his sister is sent to an orphanage. Because that grocery store also housed a U.S. Post Office his crime becomes a federal offense. Young never sees his sister again and is sentenced to Leavenworth Penitentiary, Kansas. After later being transferred to Alcatraz, he participates in an escape attempt with two other prisoners.
In San Francisco, Sasha Petrosevitch (Steven Seagal) is a Russian car thief who's brought in by criminal Nick Frazier (Ja Rule) to work for crime boss Sonny Eckvall (Richard Bremmer), who apparently shot and killed Sasha's wife. After some time, FBI Special Agent Ellen "E. Z." Williams (Claudia Christian) and her team show up to nail Nick, but things go bad, and Sasha gets shot.
Walker (Lee Marvin) works together with his friend Mal Reese (John Vernon in his first major role) to steal a large amount of cash from a courier transporting funds for a major gambling operation, with the deserted Alcatraz island as a drop point. Reese then double-crosses Walker by shooting him, leaving him for dead. Reese also makes off with Walker's wife Lynne (Sharon Acker).
Robert Stroud (Lancaster) is imprisoned as a young man for committing a murder in Alaska. He is shown as a rebellious inmate, fighting against a rigid prison system: on his way to jail by train he breaks open the window to allow the suffocating inmates to breathe. His rebellious attitude puts him in conflict with Harvey Shoemaker (Malden), the warden of Leavenworth Prison.
After the New Alcatraz massacre, long time inmate Twitch (Kurupt) gets himself transferred to another. He claims it's to be closer to his lady but his real motives are a bit more grandiose than that.
Alex Gardner (Nicholas Celozzi), a college student suffers from reoccurring nightmares in which he experiences the deaths of the victims of a vicious killer who lived on Alcatraz, before it became a prison. When the nightmares begin manifesting in reality, and his friends see him hovering over his bed, his teacher (Donna Denton), an occultist, tells him to go to the island to face down the ghost of the killer. The friends become stranded on the island, and Alex's brother Richard (Tom Reilly) becomes possessed, killing some friends and raping one of the girls. Alex is aided in his quest by the ghost of Sammy Mitchell (Toni Basil), a singer for the band Bodybag. Sammy teaches Alex how to levitate and escape his body, and is also the subject of a dance routine, intercut into the film. The friends lure the ghost of the killer, and Alex's brother into the prison chapel, and blow it up, releasing the curse.