A new mayor has announced a policy requiring the police department to accept all willing recruits. Not everyone in the police force is happy about the new changes. The main character, Carey Mahoney, is a repeat offender who is forced to join the police academy as an alternative to jail, a proposal by the officer who has been lenient on Mahoney due to knowing his father, who was also a policeman. Mahoney reluctantly agrees to this and decides that he will get himself thrown out. However, the chief of police, outraged by the mayor's lowered requirements, decides that the new cadets should be forced to quit rather than being thrown out. Lieutenant Thaddeus Harris, who trains the cadets, agrees with the plan and employs tactics to make their lives as miserable as possible so that they do in fact quit. Mahoney tries many schemes to get thrown out as he cannot quit, as part of the deal made with the officer said if he quit, he was going to be sent to jail. But toward the middle of the film he decides to stay for good having fallen in love with Karen Thompson, a fellow police cadet played by Kim Cattrall.
While in the academy, Mahoney becomes friends with fellow cadets Larvell Jones, Eugene Tackleberry, and especially, Moses Hightower (played by former pro football great Bubba Smith), a quiet giant of a man, after helping him prepare for the critical driving test. After passing, Hightower is very thankful to Mahoney. Unfortunately, Hightower gets himself thrown out of the academy because of an incident when, after fellow cadet Laverne Hooks has been racially insulted, in which he lifts and turns over a police car with the hated cadet Copeland inside.
Soon later, Mahoney gets involved in a lunchroom brawl caused by Copeland and Blankes, and takes the blame for throwing the first punch, which finally gives Lt. Harris the green light to expel his most despised cadet. Before Mahoney actually leaves the premises, however, a major riot breaks out downtown. The resulting police emergency forces the cadets into real action for the first time. During the riot, a tough outlaw manages to steal two cadet revolvers (one from Copeland and the other from Cadet Blankes). The outlaw grabs and disarms Lt. Harris by surprise, taking the officer to the roof of a nearby building as a hostage. Mahoney, despite his past troubles with Harris, dodges gunfire and climbs to the roof in a rescue attempt. This attempt fails and Mahoney is taken as a second hostage. Just as both hostages are about to be killed, it is none other than Hightower who suddenly appears on the rooftop in civilian clothes. The former cadet, who was working at a nearby florist just minutes earlier and left his shop due to the riot, manages to convince the hostage taker he is on his side. When asking whom the hostage-taker should shoot first, Hightower points at Harris, before knocking the hostage-taker out with a massive punch, thus rescuing Mahoney and Harris just in time.
Mahoney and Hightower both graduate from the academy along with the other passing cadets, and both receive the academy's highest commendation ever bestowed upon a cadet for their rescue of Lt. Harris and capture of his kidnapper. Towards the end Mahoney is tricked by Commandant Lassard with a hooker who is good at giving blowjobs inside the podium.
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