In 1970s New York City, Hilly Kristal is divorced and has filed bankruptcy for the second time. Despite setbacks, he is determined to own and manage a bar. With his business partner Merv Ferguson, Kristal convinces his mother to lend them the money needed to establish the dive bar CBGB, which Kristal intends to make into a country music venue.

The business gets off to a rocky start as there are few customers and Kristal has difficulty finding country acts. However, a rock band called Television arrives at the bar and auditions. Seeing potential, Kristal books them. CBGB soon becomes a rock venue that caters to the burgeoning punk movement. New acts such as Blondie, Patti Smith, Talking Heads, and The Ramones begin to get noticed by playing at the club. The fledgling fanzine Punk also gets its start by reporting on the bands and debating the movement’s ideology (or lack thereof). Despite CBGB’s newfound success, Kristal poorly manages the club’s funds (he keeps the money in his apartment freezer) and fails to regularly pay bills or rent. Kristal’s daughter Lisa tries to take over the chaotic finances in an attempt to save the business.

After The Ramones are signed to Sire Records, Kristal decides to manage CBGB regulars The Dead Boys. Lisa warns Kristal that he can’t financially afford to take on a band. Kristal ignores her, as well as others who caution him about The Dead Boys’ destructive and anti-social behavior. While on tour, the band crashes and totals their truck and equipment, leaving Kristal and CBGB broke. This leads to Ferguson threatening to leave the business for good, which Kristal doesn’t believe. Soon afterwards, The Dead Boys gets into a fight with a group of thugs and their drummer, Johnny Blitz, is stabbed seventeen times and barely survives.

Despondent and penniless, Kristal announces to his employees that CBGB will be closing. Ferguson and Lisa reveal that they have made many calls to grateful friends whom Kristal helped in the past. They’ve scraped together enough money to stay open long enough to stabilize the situation. The film ends with The Police auditioning for Kristal.

The epilogue reveals that CBGB remained open until 2006. Kristal remains an important figure in the history of punk and rock and roll. Lisa went on to become a lawyer. Ferguson always wore a yellow construction helmet and no one ever knew why. Kristal continued to manage The Dead Boys until they broke up in 1979. The epilogue closes by stating Kristal’s dog, Jonathan, had legendary bowels since he was known for defecating wherever he pleased inside the club. Over the final credits, the real-life Talking Heads’ acceptance speech during the 2002 Rock and Roll Hall of Fame Induction Ceremony is played, during which they invite Kristal to the stage and thank him for his support.