Travis Bickle is a 26-year-old living in New York City. When applying for a job as a taxi driver, he says he is a former U.S. Marine who served in the Vietnam War and was given an honorable discharge in May 1973, and has had "some" education. With few friends, and suffering from depression, loneliness, existential crises, and severe and chronic insomnia, he takes a job as a graveyard shift cab driver to occupy his time, working grueling 12–14 hour shifts 6–7 days a week. Working late at night in dangerous neighborhoods, his customers tend to include pimps and drug addicts. He is visibly angered by them, and begins fantasizing about "cleansing" such "filth" from the streets.
Bickle becomes attracted to a woman, Betsy (Cybill Shepherd), who works in the local campaign office of presidential candidate and United States Senator Charles Palantine. Bickle often spies on Betsy from his cab, and finally enters the office to ask her out. They meet for coffee, and Betsy finds him strange but charming, and agrees to see him again. He then takes her to a porn theater he frequents, which disgusts her and makes her refuse to see him again.
After Betsy rejects him, Bickle becomes increasingly paranoid and starts acting out his fantasies. He buys several guns and takes to carrying them secreted about his person – taped to his limbs, for example, or in hidden spring-loaded holsters. He begins a physical training regimen which consists of doing 50 pushups and 50 pullups every morning and practices an intimidating, thuggish presence in the mirror to use on whoever challenges him. Eventually, he shaves his head into a Mohawk. He attends one of Palantine's speeches, apparently intent on shooting him. However, he attracts the notice of Secret Service agents and flees.
He later becomes obsessed with protecting Iris Steensma (Jodie Foster), a 12-year-old prostitute he has seen on his route. He pays her pimp, Matthew "Sport" Higgins (Harvey Keitel), for her time, but is not interested in having sex with her; instead, he tries to persuade her to leave prostitution and return home. Iris rebuffs him, only increasing his anger and resolve to take her away from a perilous life. He confronts Sport and shoots him in the stomach, leaving him to die on the street. He then goes on a rampage through a brothel with his concealed weapons while Iris is servicing a client. Bickle shoots the approaching bouncer's hand off as soon as he walks in, but he in turn is shot in the neck from behind by a dying Sport.
Bickle begins to advance only to have the wounded bouncer attack him while going up the stairs. Iris' client, a Mafioso, overhears the previous gunshots; he sneaks up behind the distracted Bickle and shoots him in the arm. Bickle kills the mafioso and the bouncer, and then turns the gun on himself, but finds that he is out of ammunition. Severely injured, Bickle collapses on Iris' couch as she is seen crying. When the police arrive, Bickle stares at them and smiles, pointing his bloodied finger like a gun at his head.