| Director | Andrew Lau, Zhaohui Mai |
|---|---|
| Budget | HK$20 million |
| Box office | HK$55.1 million |
Hon Sam, a Hong Kong triad boss, sends Lau Kin-ming, a young gangster, to the police academy to become his mole in the Hong Kong Police Force. Around the same time, cadet Chan Wing-yan is ostensibly expelled from the police academy, but is actually selected to be an undercover cop reporting only to Superintendent Wong Chi-shing, who sends him to infiltrate Hon's triad. Over the next ten years, Chan becomes increasingly burdened by the psychological strain of maintaining his undercover identity. Meanwhile, Lau quickly rises through the ranks, becoming a Senior Inspector.
After successfully infiltrating the triad, Chan informs Wong of a transaction between Hon and some Thai cocaine dealers, which Wong's team interrupts. However, Lau alerts Hon, giving him enough time to get his henchmen to dispose of the evidence. After this incident, Wong and Hon realise they each have a spy within their own organisations, and race each other to uncover the moles. By this time, both Chan and Lau are struggling with their double lives. Chan is afraid he is turning into an actual criminal while also fearing his cover will be blown; he begins undergoing sessions with psychiatrist Lee Sum-yee and jokingly tells her that he is a cop. Meanwhile, Lau appreciates his life as a respected police officer and wants to sever his ties with the triad.
Lau is tasked by Hon to identify the cop who infiltrated the triad; coincidentally, he is also assigned by the HKPF to lead the mission to uncover the triad's mole within their ranks. He uses his new role to have Wong surveilled, hoping to catch him meeting his mole. Wong meets Chan on a rooftop to discuss Hon's next drug shipment as well as Chan's fear of being uncovered. Hon learns about Wong's location from Lau and sends his henchmen to confront them. Chan escapes from the building while Wong tries to distract the gangsters but ends up being thrown off the roof to his death. Just then, the police show up and a shootout ensues. Henchman Keung, unaware that Chan is the mole, chauffeurs him away from the scene but succumbs to a gunshot wound he sustained earlier. When the news reports that Keung was apparently an undercover cop, Hon assumes he was the mole. Using Wong's phone, Lau contacts Chan and convinces him to collaborate in taking Hon down. The police successfully foils Hon's subsequent drug deal and arrests his henchmen. Lau then betrays Hon and kills him.
Everything seems to have fallen into place—Chan can revert to his true identity as a cop while Lau has erased his criminal connections. At police headquarters, Chan and Lau meet for the first time. As Lau prepares to reinstate Chan into the police force, Chan deduces that Lau was the mole and leaves promptly. Realising what had happened, Lau takes possession of Chan's police identity file to use as leverage to dissuade Chan from exposing him. Chan meets with Lee, the only person left whom he can trust, and convinces her that he truly is a cop. Chan then sends a CD to Lau's address containing a recording of Lau's earlier meeting with Hon. Lau's fiancée, Mary, inadvertently listens to the CD and discovers Lau's secret. Chan arranges to meet with Lau on the same rooftop where Wong was killed. There, he disarms Lau and points a pistol to his head. Lau states calmly that he wants to start over as a good person, but Chan rejects his plea to help him conceal his criminal past. Inspector "Big B" arrives and points his gun at Chan, ordering him to release Lau. Chan holds Lau hostage at gunpoint and backs into a lift, but is shot in the head by Big B. Big B then reveals to Lau that he is also a mole planted by Hon, and assures Lau of his loyalty. When they ride the lift down to the ground floor, Lau kills Big B.
Six months later, Lee discovers records of Chan's identity as an undercover cop and he is buried with honours beside Wong. Lau salutes Chan at his funeral. Meanwhile, the internal affairs case is closed after they conclude that Big B was the mole in the police force. A flashback shows the day that Chan was ostensibly expelled from the police academy, with Lau looking back with guilt and wishing he was the one expelled instead.
An alternate ending for the film was shot in order to comply with Article 25 (7) of the Chinese Film Administration Regulations specifying that films cannot propagate obscenity, gambling or violence, or abet to commit crimes. In the original Hong Kong ending, Lau concealed his true identity as a triad spy and identified himself as a police officer to avoid punishment. Therefore, the original ending was deemed to promote criminal activity and injustice, and an alternate ending was filmed to make the film suitable for mainland China. In the alternate ending, Inspector Cheung discovers evidence of Lau's criminal activity and immediately arrests him when he gets off the lift. This alternate ending was shown in mainland China and Malaysia.