The film begins at the wedding of Don Vito Corleone's daughter Connie to Carlo Rizzi in New York City in late summer of 1945. Because "no Sicilian can refuse a request on his daughter's wedding day", Corleone, known to his friends and associates as "Godfather", and Tom Hagen (the Corleone family consigliere, or counselor) are preoccupied with hearing requests from friends and associates. Meanwhile, the Don's youngest son Michael, who has returned from World War II service as a highly decorated war hero, tells his girlfriend Kay Adams anecdotes about his father's criminal life, reassuring her that he is not like his family.
Among the guests at the celebration is the famous singer Johnny Fontane, Corleone's godson, who has come from Hollywood to petition the Godfather's help in landing a movie role that will revitalize his flagging career. Jack Woltz, the head of the studio, will not give Fontane the part, but Don Corleone explains to Johnny: "I'll make him an offer he can't refuse." Hagen is dispatched to California to fix the problem, but Woltz angrily tells him that he will never cast Fontane in the role, for which he is perfect, because Fontane seduced and "ruined" a starlet that Woltz favored. The next morning, Woltz wakes up to find the bloody severed head of his prize stud horse in the bed with him.
Upon Hagen's return, the family meets with heroin dealer Virgil "The Turk" Sollozzo, who is being backed by the rival Tattaglia family. He asks Don Corleone for political and legal protection, as well as financing to start the mass importation and distribution of heroin, but despite the huge amount of money to be made, Corleone refuses, explaining that his political influence would be jeopardized by a move into the narcotics trade. The Don's oldest son, hotheaded Sonny, who had earlier expressed to the Don his support of the family entering into the narcotics trade, breaks rank during the meeting and questions Sollozzo's assurances as to the Corleone Family's investment being guaranteed by the Tattaglia Family. His father, angry at Sonny's dissention in front of a non-family member, later privately rebukes him. Don Corleone then dispatches his aide, Luca Brasi, to infiltrate Sollozzo's organization and report back with information.
Soon after Don Corleone's refusal, he is shot several times in an assassination attempt at a local market. It is not publicly known whether he survived. Meanwhile, Sollozzo and the Tattaglias kill Luca Brasi. Sollozzo then abducts and persuades Tom Hagen to offer Sonny the deal previously offered to his father. Sollozzo reasons that Sonny is more amenable to the deal than was his father, and that with Don Corleone out of the way, Sonny will accept the deal. Enraged, Sonny refuses to consider the deal, promising a war with the Tattaglias and Sollozzo.
Michael, who is considered a "civilian" (not involved in the mob business) by the other mafia families and therefore able to live a more normal life, visits his father in the hospital. He is immediately shocked to find that there are no police officers or Corleone Family men guarding him. Realizing that his father is again being set up to be killed, he calls Sonny with a report, then moves his father to another room. He then goes outside to watch the door. With the help of an overwhelmed Enzo (the baker), who feels indebted to the Don, he bluffs away Sollozzo's men. Police cars soon arrive with the corrupt Captain McCluskey, who breaks Michael's jaw after he insinuates that McCluskey is being paid by Sollozzo to set up his father. Just then, Hagen shows up with "private detectives" licensed to carry guns to protect Don Corleone, and takes Michael home.
Following the attempt on the Don's life at the hospital, Sollozzo and Captain McCluskey, who is acting as Sollozzo's bodyguard, request a meeting with Michael under the auspices of ameliorating their differences. Michael volunteers to kill both men during the meeting, which initially amuses Sonny and the other senior members of the Corleone family, with Sonny admonishing him for reacting too personally and emotionally. However, Michael convinces them that killing Sollozo and McCluskey is in the family's interest ("It's not personal. It's strictly business."). The meeting between Michael and Sollozzo, with McCluskey attending, is arranged at a quiet, local restaurant, as requested by Michael so he will "feel safe". Michael excuses himself to go to the restroom, retrieves a planted revolver, and assassinates Sollozzo and McCluskey with near-point-blank-range shots to the head. To avoid his arrest for the murders, Michael is sent to Sicily while the Corleone family prepares for all-out warfare with the rest of the Five Families, who unite against the Corleones, as well as a general clampdown on the mob by the police and government authorities.
While in Sicily, Michael lives under the protection of Don Tommasino, an old friend of the family. While there, he falls in love with and marries a local girl, Apollonia, who is subsequently murdered during an attempt on Michael's life.
Meanwhile, back in New York, Don Corleone returns home from the hospital and is distraught to learn that Michael was the one who killed Sollozzo and McCluskey. Some months later, in 1948, Sonny severely beats Carlo for brutalizing the expecting Connie, and threatens to kill Carlo the next time he abuses her. The next time Carlo beats her, Sonny drives off alone to fulfill his threat. On the way, he is ambushed and Tommy-gunned to death at the causeway tollbooth.
Instead of seeking revenge for Sonny's killing, Don Corleone meets with the heads of the Five Families to arrange an end to the war. Not only is it draining all of their assets and threatening their survival, but ending the conflict is the only way that Michael can return home safely. Reversing his previous decision, Vito agrees that the Corleone family will provide political protection for Philip Tattaglia's traffic in heroin. At the meeting, Don Corleone realizes that Don Barzini, not Tattaglia, was responsible for the mob war and Sonny's death.
With his safety guaranteed, Michael returns from Sicily. More than a year later, he reunites with his former girlfriend, Kay, telling her that he wants to marry her. With the Don semi-retired, Sonny dead and middle brother Fredo considered incapable of running the family business, Michael is now in charge, and he claims that the family business will soon be completely legitimate.
Clemenza and Tessio, two Corleone Family caporegimes (captains) complain that they are being pushed around by the Barzini Family and ask permission to strike back, but Michael refuses. With his father as consigliere, he plans to move the family operations to Nevada and after that, Clemenza and Tessio may break away to go on their own. Michael further promises that Connie's husband, Carlo, is going to be his right hand in Nevada, while Hagen will be the Family's Las Vegas lawyer.
In Las Vegas Michael is greeted by Fredo in the hotel-casino partly financed by the Corleones, and run by Moe Greene. Michael explains to Johnny Fontane that the Family needs his help in persuading Johnny's friends in show business to sign long-term contracts to appear at the casino. In a meeting with Moe Greene, Michael offers to buy out Greene but is rudely rebuffed. Greene believes the Corleones are weak and that he can secure a better deal from Barzini.
Michael returns home. In a private meeting, Vito explains his expectation that the Family's enemies will attempt to kill Michael by using a trusted associate to arrange a meeting as a pretext for assassination. Shortly afterwards, Don Vito dies of a heart attack while playing with his young grandson in his tomato garden.
During the funeral, Tessio conveys a proposal for a meeting with Barzini, which identifies him as the traitor that Vito was expecting. Michael arranges the murders of Moe Greene, Philip Tattaglia, Emilio Barzini, Anthony Stracci, and Carmine Cuneo, all to take place during the baptism of Connie's and Carlo's second son, for whom he will be godfather. After the baptism, Tessio believes he and Michael are on their way to meet with Barzini. But instead, he is taken away by Willie Cicci and other buttonmen to be killed. Michael confronts Carlo about Sonny's murder and tricks him into admitting his role in setting up the ambush. "Today", Michael tells him, "I settle all Family business." Michael informs Carlo that his punishment is to be excluded from the family business and hands him a plane ticket to exile in Nevada. Carlo gets into a car to go to the airport, and is garroted by Clemenza.
Later, Connie confronts Michael, accusing him of Carlo's murder. Kay questions Michael about Connie's accusation, but he refuses to answer. She insists, and Michael lies, assuring his wife that he had no role in Carlo's death. Kay is relieved by his denial. As the film ends, she watches Clemenza and new caporegime Rocco Lampone pay their respects to Michael, kissing his hand and addressing him as "Don Corleone." The door is closed by new capo Al Neri, as she realizes that Michael has become the new Godfather.
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