As the film opens, Joe Buck (Jon Voight) is exuberantly preparing to leave his run-down Texas hometown to head for New York City. He has outfitted himself as a spiffy cowboy, intending to "hustle" wealthy New York women who will beg for his sexual favors, and pay him in the bargain. As he interacts with the bus passengers during the long journey to the Big City, we see that underneath the bravado, Joe is anxious for friendship and haunted by memories of a lonely childhood. Abandoned by his mother (a father is never in the picture), Joe was raised by his grandmother, who spoiled him, yet neglected him, and whose assorted boyfriends competed with him for her attention.

In New York, Joe is naive and out of place. His attempts to hustle women are rebuffed or backfire ludicrously--he ends up paying them. In a Times Square bar, he runs into a crippled con-man, "Ratso" Rizzo (Dustin Hoffman), who offers to be his "manager" but steals his money in a scam. As his funds run out, Joe resorts to selling himself in a homosexual encounter; even this backfires--he picks up a student who has no money.

As Joe is becoming quite desperate--homeless, with only his portable radio for company--he runs into Ratso again. Partly to make amends, and partly out of his own loneliness, Ratso invites Joe to his "home," a room in an abandoned building, without electricity or heat. Warily at first, and then with increasing mutual respect, the two set up housekeeping. Theirs is a daily struggle for survival--petty thievery, selling blood, and fantasies of a gigolo's life in warm Miami sustain them.

In the heatless apartment Ratso's health deteriorates--he has a chronic cough, smokes constantly, and the weather is frigid. Underground movie-makers choose them as street curiosities for the camera, inviting them to an avant-garde party replete with food, drugs, and a rich woman (Brenda Vacarro), who takes Joe into her bed and pays him for it, arranging another "transaction" later in the week for a woman friend.

Joe thinks he has finally made it. Ratso, however, has a high fever, can no longer walk, and refuses medical attention. Joe makes the choice: he assaults and steals for the busfare to take Ratso to Miami. During the trip Joe tells Ratso, "I'm going to get some sort of job--outdoor work--I'm no hustler." But Ratso, seated next to him, has died. Joe puts his arm around the dead man, protecting him from the curious stares of the other passengers.