A disillusioned LAPD detective, Detective II Tom Ludlow (Keanu Reeves), rarely plays by the rules and is haunted by the death of his wife. Ludlow and all of the cops in his unit, including their commander, Captain III Jack Wander (Forest Whitaker), bend and break the rules of conduct on a regular basis. Their intention is often to deal with crime in a manner that they perceive to be more efficient, which leads them to routinely lie, falsify reports and manipulate evidence, rather than let it get caught up in red tape.

The movie starts with Tom Ludlow waking up, having been drinking the night before. Working undercover, he meets with Korean gangsters (whom he believes have kidnapped two Korean schoolgirls) in a parking lot, who are looking to buy a machine gun from him. After a vicious beat down, the Koreans then proceed to steal Tom's car. However, Tom planned on this and locates the vehicle via GPS. Upon arrival at their hideout, Tom storms in and kills the four gangsters inside and then covers up what really happened before he locates the missing children. He gently coaxes the children out of the house. While the other officers in his unit congratulate him, Tom is confronted by his former partner, Detective II Terrence Washington (Terry Crews) about Tom's criminal activities. Washington no longer approves of the corruption and deception and has gone straight, reporting the problems to Captain II James Biggs (Hugh Laurie), of internal affairs, who starts an investigation against Ludlow.

Upset at Washington for "snitching", Ludlow follows him to a convenience store to confront him. However, Washington is killed by two gangbangers in the store in an apparent robbery, with Ludlow present. Though Ludlow is innocent, the circumstances can heavily implicate him in the murder, which is also known as "wrong place, wrong time". The DNA of two criminals known as Fremont and Coates is found at the scene, as well as cash and drugs in Washington's car. It is assumed that Washington himself was corrupt, despite his seemingly changed attitude, and that he had been stealing drugs from the department's evidence room and selling them to Fremont and Coates. Initially Ludlow believes that Washington was dirty but after a discussion with Washington's widow Linda (Naomie Harris), Ludlow starts to believe that Washington was set up and assassinated. Ludlow then seeks out the help of Detective I Paul "Disco" Diskant (Chris Evans), an honest young detective who is well aware of, and is disgusted by, Ludlow's corruption. Diskant has been assigned to the robbery/murder case of Washington, to join him in his own personal investigation. Their search for the truth involves some tough interrogation of other criminals including Skribble (Cedric the Entertainer), which eventually leads them to a house in the hills where they discover the bodies of the real Fremont and Coates buried in a shallow grave. The badly decomposed condition of the bodies makes it apparent that they were killed well before Washington's murder.

Ludlow and Disco, posing as corrupt cops, take over Washington's activity of stealing and selling drugs before the two and Winston set up a meeting with the two criminals (Cle Shaheed Sloan and Common) who are masquerading as Fremont and Coates and are discovered to be the two gangbangers who killed Washington; one of the criminals is known as LeShawn. The meeting goes bad when the criminals recognize Ludlow from the convenience store. Disco also realizes that he recognizes the two criminals, but before he can reveal their true identities, Coates shoots Disco in the chest before he tries to persuade Skribble to kill Ludlow but he refuses and is killed by Fremont. A gunfight ensues, and Ludlow manages to avenge Washington's murder by killing both Fremont and Coates before he is forced to watch Disco die as he was too late to save him. Ludlow then escapes back to his new girlfriend Grace Gracia's (Martha Higareda) house, where a news report on TV reveals that the dead criminals were also two undercover deputy sheriff's but were corrupt as they murdered Washington, Disco and Skribble as well as the real Fremont and Coates. Ludlow is shocked at how the story and his identity could be on television so quickly, as he is now wanted for all of the murders.

Shortly afterwards, Ludlow is subdued at his girlfriend's house by Detective I Cosmo Santos (Amaury Nolasco) and Detective I Dante Demille (John Corbett), two fellow officers from his unit who admit that they planted Fremont and Coates' DNA, the cash and the drugs at the scene of Washington's murder. It turns out that Santos and Demille were actually the ones stealing drugs from the department's evidence room and selling them to the two criminals posing as Fremont and Coates. Also Lud realizes through the ensuing conversation that Washington was actually trying to turn corrupt Wander in to Briggs, that apparently led to his killing, and that Wander was the mastermind behind all this. The two cops disclose that they have been watching over Lud since the very beginning & then take Ludlow out to the back of the house where the bodies of the real Fremont and Coates were found earlier, for execution. However, Ludlow manages to kill both of them. Realizing the security disk he gave to Linda earlier which discloses the real circumstances of Washington murder has now made her a target, Tom heads for Washington's house. When Ludlow arrives, he finds Wander's second in command, Sergeant II Mike Clady (Jay Mohr) already attacking Linda and attempting to steal the security disk. Ludlow rescues her and captures Clady, placing him in the trunk of his own car.

Ludlow goes to Wander's house to confirm that Wander really wanted him dead. He asks Wander if he can "fix it", and asks Wander to text Clady and get his help. Wander sends a text and Ludlow (who has Clady's phone) reads Wander's message telling Clady to come to his house and kill Ludlow. A struggle between Ludlow and Wander follows, and Ludlow ultimately handcuffs Wander to a stair railing. Wander reveals that he has incriminating evidence on just about everybody in the department, as well as judges, councilmen and politicians. Wander explains that he's been using the incriminating evidence he has to quickly move up the department's ranks as well as bury his unit's corruptions. Wander tries to convince Ludlow that he is his friend and best officer, and then tries to bribe him with a large amount of stolen money and incriminating documents hidden in a wall of his home. Ludlow tells Wander "You were my best friend" and then fatally shoots him twice in the chest.

Captain II Biggs and Sergeant I Green, who were "investigating Ludlow", arrive at the scene and Biggs reveals to Ludlow that they used him to bring down Wander and get access to his files by opening Ludlow's eyes to the real corruption going on within his unit. As he leaves, Biggs tells Ludlow that the department does indeed need men like him; officers who are willing to bend the rules, but are ultimately honest at heart.

In 2004, it was announced that Spike Lee would be directing the film for a 2005 release. In 2005, it was announced that Oliver Stone was in talks to direct the film. However, Stone later denied this. Training Day screenwriter David Ayer took over the project.

On February 5, 2008, it was announced that Fox Searchlight Pictures changed the film's title from The Night Watchman to Street Kings.

Street Kings received mixed reviews from critics. Metacritic reported the film had an average score of 55 out of 100, based on 28 reviews. Many viewers praised the film for its numerous plot twists. On the other hand, Rotten Tomatoes's Tomatometer gave a 37% for the film, with their consensus saying 'Street Kings contains formulaic violence but no shred of intelligence'.