In New York City, four men wearing similar disguises and carrying concealed weapons board the same downtown 6 train, Pelham 1-2-3, at different stations. Using codenames Mr. Blue, Mr. Green, Mr. Grey, and Mr. Brown, they take 18 people, including the conductor and an undercover police officer, hostage in the first car.
Communicating over the radio with Zachary Garber, a New York City Transit Police lieutenant, Blue demands a $1 million ransom to be delivered within one hour and threatens to kill one hostage for every minute it is late. Green sneezes periodically, to which Garber always responds, “Gesundheit”. Garber, his co-worker Lt. Rico Patrone, and others cooperate while speculating about the hijackers’ escape plan. Garber surmises that one hijacker must be a former motorman since they were able to uncouple the car and park it down the tunnel below 28th Street.
Conversations between the hijackers reveal that Blue was a mercenary in Africa; Green was a motorman caught in a drug bust; and Blue does not trust Grey, who was ousted from the mafia for being too violent. Just then, Grey shoots and kills a supervisor from Grand Central sent to investigate the stalled train.
The ransom is transported uptown in a speeding police car that crashes well before it reaches 28th Street. As the deadline is reached, Garber bluffs Blue by telling him that the money has reached the station and just has to be walked down the tunnel to the train. A police motorcycle arrives with the ransom, but as two patrolmen carry the money down the tunnel, one of many police snipers in the tunnel shoots at Brown, and the hijackers exchange gunfire with the police. In retaliation, Blue kills the conductor.
The money is delivered and divided among the hijackers. Blue orders Garber to restore power to the subway line, set the signals to green all the way to South Ferry, and clear the police from stations along the route. Before the process is complete, however, Green moves the train farther south. When Garber becomes alarmed, Blue explains that he wanted more distance from the police inside the tunnel.
The hijackers override the dead-man’s switch so that the train will run without anyone at the controls. Garber joins Inspector Daniels above ground where the train stopped. The hijackers set the train in motion and get off. As they make their way to the tunnel’s emergency exit, the undercover officer jumps off the train and hides between the rails. Unaware that the hijackers have left the train, Garber and Daniels drive south above the train’s route. With no one at the controls, the train gains speed.
The hijackers collect their disguises and weapons for disposal, but Grey refuses to surrender his gun, resulting in a stand-off with Blue, who shoots him dead. The undercover officer shoots and kills Brown, and exchanges fire with Blue while Green escapes through the emergency exit onto the street.
Garber, contemplating the train’s last suspicious movement, concludes that the hijackers bypassed the dead-man feature and are no longer on board. He returns to where the train had stopped, enters the same emergency exit from street level, and confronts Blue as he is about to kill the undercover officer. With no escape, Blue deliberately places his foot against the third rail and electrocutes himself.
Meanwhile, Pelham 1-2-3 hurtles through the southbound tunnel. When it enters the South Ferry loop, its speed triggers the automatic safeties. It screeches to a halt, leaving the hostages bruised but safe.
Since none of the three dead hijackers was a motorman, Garber surmises that the lone survivor must be. Working their way through a list of recently discharged motormen, Garber and Patrone knock on the door of Harold Longman (Green). After hastily hiding the loot, Longman lets them in, bluffs his way through their interrogation, and complains indignantly about being suspected. Garber vows to return with a search warrant. As Garber closes the apartment door behind him, Longman sneezes, and Garber reflexively says “Gesundheit”, as he had over the radio. Garber re-opens the door and gives Longman a caustic stare.