When Inspector Mahadev Bhosale (Sanjay Dutt) is asked by his seniors to form a hit squad to take on the Mumbai underworld, he recruits Shiv Narayan (Rana Daggubati), an honest and brave police officer who had been suspended for an encounter killing. Together, Mahadev and Shiv along with others in the "Department" take on underworld don Sawatya (Vijay Raaz) and his gang. Sawatya, in spite of many exhortations of  his number two, D.K. (Abhimanyu Singh), and D.K.’s feisty girlfriend, Naseer (Madhu Shalini), does not hit back at the police.

There is also the gangster-turned-minister, Sarjerao Gaikwad (Amitabh Bachchan), who takes Shiv under his wing after Shiv saves his life at a public rally. Mahadev warns Shiv that Sarjerao is just using him. After a certain turn of events, it is exposed that Mahadev is actually working for Mohammad Gauri, who is actually an underworld don, and is, at the Ganglord’s behest, finishing off Sawatya’s gang. While Shiv declines to be a part of Mahadev’s corrupt world, and Mahadev agrees to let him be, things start falling apart between the mentor and the apprentice when Shiv starts taking on a sub-gang formed by D.K., under Mahadev’s protection.

'Department' is a story of a terrifying power struggle within the bowels of the mother of all powers - the police 'Department'.