Niko Bellic is a Serb veteran of the Bosnian War. He arrives in Liberty City, hoping to start a new life with his cousin Roman. He quickly learns that Roman's tales of luxury and wealth were lies to cover his problems. Looking for work, Niko starts running errands for Roman's protector, the Russian gangster Vlad, and meets the Jamaican drug dealer "Little" Jacob, striking up a friendship.
However, Niko reveals he has ulterior motives for being in Liberty City. During the war, Niko's squad was betrayed to the enemy and only he and two others survived. He knows one of them is in Liberty City. Eventually, Niko discovers that Vlad is sleeping with Roman's girlfriend Mallorie (Roman is too weak-willed to do anything about it). Niko kills Vlad and this leads Niko to meet Mikhail and Dimitri, the leaders of the Russian Mafia. Niko also meets Brucie, a roid monkey who enjoys street racing.
Eventually, Dimitri convinces Niko to assassinate Mikhail, hoping to make peace with a rival mob. However, he then betrays Niko to a former employer. With his apartment and cab depot burned down, Niko and Roman flee to a neighboring borough, where Niko begins work for Puerto Rican drug dealers. His girlfriend Michelle is revealed to be a government agent. Her boss, an unnamed government official, employees Niko to deal with terrorists plaguing Liberty City.
Niko then does some work for a small Irish mob and their Italian bosses. After gaining their trust, Niko gets information on the whereabouts of Florian Cravic (the man who Niko believes betrayed his squad). However, he finds that Florian is not the one who betrayed him; Florian (now called Bernie Crane) is a gay aerobics instructor and is secretly dating the ultra-conservative deputy mayor. Bernie enlists Niko's help to stop blackmailers threatening to expose the relationship, the work of Dimitri.
Afterwards, Niko finds work with high-level mafia officials and causes friction with another mob. As a thank-you for all his favors, the government agent present Darko Brevic (the true guy who betrayed Niko's squad). Niko can either kill or spare Darko (sparing may be a fate worse than death for him, as he is a messed up druggie).
There are two possible finales:
Deal: Niko goes through with a deal between the mafia and Dimitri. At Roman's wedding, Dimitri kills Roman, sending Niko into a homicidal rage to kill Dimitri.
Revenge: Niko kills Dimitri before the deal. At Roman's wedding, the mafia kill Katie, Niko's girlfriend. Niko goes into a homicidal rage to destroy the mafia.