Tommy Vercetti, a loyal former member of the Forelli Family, has just been released in 1986, serving 15 years for killing 11 men in the Harwood District of Liberty City in early 1971, earning him the nickname The Harwood Butcher. Tommy's old boss, Sonny Forelli, fears that Tommy's presence in Liberty City will heighten tensions between the other Liberty City families and bring unwanted attention to his organisation's criminal activities.
To prevent this from happening, Sonny ostensibly promotes Tommy to a capo and sends him to Vice City under the guardianship of a crooked lawyer and Sonny's contact Ken Rosenberg to act as their buyer for a series of cocaine deals for Sonny, whose interest is to expand his family activities down the South and to overrun the Liberty drug market with the high-end cocaine from Vice City, hoping to create a monopoly on the Liberty City drug ring to establish the Forelli Crime Family on the top.
Soon, Tommy and his bodyguards are awaited at the Escobar International Airport by Ken, who gives them an info about the deal and takes them to the docks, where they are awaited by the Vance Crime Family, prominent drug kingpins of Vice City led by Victor Vance, who arrive in the chopper with Diaz. As they settle the deal, they are ambushed by several armed and masked men, who kill Victor and Tommy's bodyguards. Tommy narrowly escapes with Ken from the docks, and as a result, he ultimately loses both Forelli's money and the cocaine in the process. Ken drives to his office, while Tommy returns to his hotel.
When Tommy informs Sonny of the ambush, Sonny loses his temper and threatens Tommy with the consequences of attempting to cheat the Mafia. Tommy promises to retrieve the money and the cocaine and kill whoever was responsible for the ambush. Towards this end, Tommy meets up again with Ken at his office, who leads Tommy to retired Colonel and mid-level drug dealer named Juan Garcia Cortez, who was Victor Vance's contact and who organised the deal between the Vances and the Forellis. Cortez expresses regret about Tommy's bad deal and promises that his own lines of inquiry are being made to find out who masterminded the ambush plot. Tommy also meets Cortez's daughter Mercedes, who becomes Tommy's confidante shortly thereafter.
While Tommy waits for the outcome of Cortez's investigation, he meets cocky 21-year old British record producer Kent Paul, real estate mogul Avery Carrington, and a mysterious man, who introduces himself as Lance Vance, younger brother of Victor and the underboss of the now-defunct Vance Crime Family, who wants revenge for the death of his brother and also wants the Vance Crime Family back on the map.
As time passes, Tommy befriends Cortez and begins to do regular work for him as an errand boy and hitman. On one such job, Tommy is called in with Lance to protect the deal of a drug baron named Ricardo Diaz during a deal with the Cubans, looking to buy some high-end cocaine. During the deal, Diaz is ambushed by a gang of Haitians, but Tommy is able to kill them and save the deal, as well as Diaz's life. Consequently, Diaz begins hiring Tommy for his own agenda. Tommy takes this work because it pays well, in spite of his distaste for Diaz. On another errand for Cortez, he plans to meet a French courier to retrieve missile chips stolen from the French government. The deal is ambushed by several French agents and Tommy later kills the courier, who fled the ambush with the chips, retrieving the items.
Tommy learns from Cortez that Cortez's own lieutenant, Gonzalez, was partially responsible for the ambush on Tommy's cocaine deal since he is the only person besides Cortez to know about the deal, and Cortez asks Tommy to kill Gonzalez as a favour, since he was a man who he did distrust and was working behind his back. Afterwards, Cortez voices his suspicion that Diaz might have been behind the ambush. Tommy initially continues the status quo to prepare for his attack, but his hand is forced when Lance attempts to take revenge by himself and fails, forcing Tommy to rush across the city and rescue him from the junkyard in which he is held. With the die cast, the two move quickly to raid Diaz's mansion and execute Diaz. With Diaz dead, and Colonel Cortez fleeing the country to escape the French, the established drug empires in Vice City quickly crumble and Tommy and Lance personally take over, becoming Vice City's drug kingpins.
Tommy becomes the head of his own organisation, the Vercetti Crime Family, distancing himself from the Forelli Family and Liberty City and more interested in personally controlling Vice City than being Forelli's puppet. But the more powerful and rich Tommy gets, the more Lance begins to exhibit paranoia and sociopathic behaviours, to the point that he begins to abuse his own bodyguards and constantly calls Tommy in states of hysteria, losing his mind over being just a powerless second-in-command as he was under his brother for the past 2 years. Tommy begins to suspect that Lance is up to something.
Tommy makes alliance with Umberto Robina's Cubans against Auntie Poulet's Haitians, even though he is at the same time hypnotised by Poulet's voodoo into helping the Haitians as well. However, Tommy and Poulet part ways Tommy and the Cubans sneak explosives into the Haitian drug factory disguised in Haitian gang cars and blow it up, effectively ending the conflict and putting the Haitians out of business, enabling the Cubans to take over Little Havana. Umberto then becomes Tommy's partner. He also becomes friends with Big Mitch Baker, a leader of the biker gang and a Vietnam veteran, with both the bikers and the Cubans becoming protectors of Vercetti family business.
As his drug business expands, Tommy buys assets in nearly bankrupt companies such as a car lot named Sunshine Autos, a cab depot Kaufmann Cabs, a popular night club called The Malibu, a local boathouse, a print shop, Print Works, an ice-cream company, and an adult film company, all of which he turns back into competitive businesses. He also becomes a personal bodyguard to glam metal band Love Fist, and pulls a major bank heist. He starts to control almost all the assets and ties of Vice City: Sunshine Autos as a chop shop, Kaufmann Cabs for money laundering, The Malibu Club for dispatching drugs, the ice-cream company for the production of drugs and the film company to control the underground movie scene.
Eventually, the Forelli family discovers that Tommy has gained control over entire Vice City and without having sent a single dime back to them. Sonny is enraged that Tommy has become independent and is hustling him, and sends collectors consisting of high-ranking Forelli members to force money out of Tommy's assets. Tommy disposes of them, but after they injure the elderly operator of his print shop of counterfeit money, he decides to cut Sonny and the Forelli family out of his business, severing his ties with the Forelli family.
An angered Sonny arrives in Vice City with a small army of mafiosi, intent on taking their tribute by force. Sonny and his henchmen soon arrive at the Vercetti Estate. Just as Tommy attempts to give them their tribute in counterfeit money, Sonny reveals he is the one who set Tommy up fifteen years before, sending him to kill the eleven men who were expecting him since he was feeling that Tommy would himself take over Sonny's business. Lance then exposes himself as a traitor, revealing Tommy's attempt to fool Sonny, and also admitting to informing Sonny about Tommy's activities in Vice City. Lance explains that he did it because Tommy started to disown him and didn't treat him equally, and wanted him dead so he could rebuild the Vance Crime Family and the fortune he had with his brother. An enraged Tommy starts a gunfight.
In the ensuing battle, Tommy first chases, ridicules, and finally kills Lance, then storms downstairs, where he faces off with Sonny,