A man holds up a pharmacy, trying to get Gentemic. When the pharmacist tells him that the drug is not available in the USA, the man gets confused and shoots the pharmacist. Two men from MUST (Murray Hill Sidewalk Team), a neighborhood watch organization, hear the shot and run after the robber. Cagney, Lacey, and some uniformed policemen join the chase. In a dark alley Cagney and policeman Jerry Mead notice a man brandishing a gun, and Mead shoots him after the required warning. To their horror they discover that the victim is Jerry Hauser, one of the men from MUST. The robber gets away.
Internal affairs immediately starts investigating the accident. A gun is found next to the victim and Lacey corroborates Cagney's story. Later, at home, she starts to doubt what she testified to.
The next morning Lacey retracts her testimony: she didn't see any gun in Hauser's hands. Cagney is very upset about this change in Lacey's statement and starts to question her partner's abilities as a police officer. To get a clear view of what really happened it becomes necessary to find the original robber. The two detectives do some extra research on Gentemic and find that it is a morphine-related analgesic only available in Sweden.
The story gets more complicated when the lab confirms that the gun found next to the body of Hauser was the one that shot the pharmacist. Cagney's story becomes less believable. She contacts Willie Cahn from Narcotics and learns that Gentemic is traded near the docks. Cahn sets up an appointment for her with undercover agent Leon Wilson.
Shortly afterwards Lacey gets a call from Cahn. Cagney shouldn't go near the docks as Wilson has been beaten up by some drug pushers. This is the first Lacey hears about Wilson, and so she decides to follow Cagney's trail to the docks. Cagney has made contact with a drug pusher but as she is about to make a deal, the gangsters try to rob her. Lacey and Cahn save her and the pushers get arrested.
With information from the pushers Cagney and Lacey look for a man called Gunnar on a ship. After a chase through the ship they can arrest him. During his interrogation he admits to robbing the pharmacy, but he also mentions that he was shot at by one of the men following him. That's why he dropped his own gun, the gun the police found. Were Cagney and Mead right after all?
Where is that second gun? Cagney and Lacey realize that the only man who could have hidden Hauser's gun is Doctor Oliver, his partner in MUST. Oliver admits to taking and hiding Hauser's gun.
With everything settled, there is still the matter of Cagney & Lacey's partnership. Cagney offers Lacey a drink to make up for her harsh words, but Lacey informs her that that may not do... for the moment.