Shinjuku Incident tells the story of Tietou, a poor worker in China who repairs tractors and longs for his sweetheart Xiu Xiu in Japan. Xiu Xiu has not contacted her family or Tietou since moving to Japan.
While attempting to illegally immigrate to Japan, Tietou loses his Chinese documents, leaving him unable to return to his home country. He is taken in by fellow Chinese immigrants in Shinjuku, who help him find illegal work.
During a police raid in the sewage system where Chinese workers are operating illegally, Tietou saves Inspector Kitano from drowning. This act leads to Tietou crossing paths with the powerful Yakuza boss Toshinari Eguchi, who is Xiu Xiu's husband.
Eguchi offers Tietou a job in exchange for his services. Tietou agrees to help Eguchi take down a rival gang, but his peaceful approach to leadership causes tension among his men and leads to a violent gang war.