Based on the true life experiences of poet Jimmy Santiago Baca, the film focuses on step-brothers Paco and Cruz, and their bi-racial cousin Miklo. It opens in 1972, as the three are members of an East L.A. gang known as the "Vatos Locos", and the story focuses on how a violent crime and the influence of narcotics alter their lives. Miklo is incarcerated and sent to San Quentin, where he makes a "home" for himself. Cruz becomes an exceptional artist, but a heroin addiction overcomes him with tragic results. Paco becomes a cop and an enemy to his "carnal", Miklo.

Sticking to great comedy in a way no one else can, Mel Brooks plays a wealthy business man who finds himself getting suckered into a bet with a rival business over the worst slum area of L.A. They both want to develop on it and both own half. Mel agrees to living as a homeless person in this neighborhood. If he can make it 30 days without his wallet or anything else, then the rival will sign over his half of the property. It's full of visual gags, one liners and even some heart warming scenes. Mel's character learns a lot along the way.