Travis Bickle is a lonely, depressed 26-year-old honorably discharged U.S. Marine and Vietnam War veteran living in isolation in New York City. Travis takes a job as a night shift taxi driver to cope with his chronic insomnia, driving passengers around the city's boroughs. He frequents the porn theaters on 42nd Street and keeps a diary in which he consciously attempts to include aphorisms, such as "You're only as healthy as you feel."
Travis becomes infatuated with Betsy, a campaign volunteer for Senator and presidential candidate Charles Palantine. After watching her interact with fellow worker Tom through her window, Travis enters to volunteer as a pretext to talk to her, then takes her out for coffee. On a later date, he naively takes her to see a pornographic film, which offends her, and she goes home alone. His numerous attempts at reconciliation by sending flowers and apologizing over the phone are rebuffed, causing him to become embittered and convinced that she is exactly like the "cold" people he detests in the city. He finally confronts her at the campaign office, berating her before being kicked out by Tom.
Travis is disgusted by the sleaze, dysfunction, and prostitution that he witnesses throughout the city. His worldview is furthered when an adolescent prostitute and runaway, Iris, enters his taxi, attempting to escape her pimp, Sport. Sport drags Iris from the taxi and throws Travis a crumpled $20 bill, which continually reminds Travis of her and the corruption that surrounds him. A similarly influential event occurs when an unhinged passenger gloats to Travis of his intentions to kill his adulterous wife and her lover. Travis confides in fellow taxi driver Wizard about his thoughts, which are beginning to turn violent; however, Wizard assures him that he will be fine, leaving Travis to his own destructive path.
In attempting to find an outlet for his frustrations, Travis begins a program of intense physical training. A fellow taxi driver refers him to an illegal gun dealer, "Easy" Andy, from whom Travis buys four handguns, most notably a .44 Magnum Smith & Wesson Model 29. At home, Travis practices drawing his weapons, and modifies one to allow him to hide and quickly deploy it from his sleeve. He also begins attending Palantine's rallies to scope out their security. One night, Travis enters a convenience store moments before an attempted armed robbery, and fatally shoots the robber. The store owner takes responsibility for the deed, claiming Travis's illegal handgun as his own.
Travis seeks out Iris, through Sport, and twice tries to convince her to stop prostituting herself, an effort which partially convinces her. After a breakfast with Iris, Travis writes and mails a letter to her. The letter, containing money, states that he will soon be dead, and that Iris should return home. Travis cuts his hair into a mohawk, and attends a public rally where he plans to assassinate Palantine. Secret Service agents notice him putting his hand inside his coat and he is chased off, never having been identified.
That evening, Travis drives to Sport's brothel in the East Village. In a moving shootout that begins outside the brothel and ends in Iris's room, Travis first kills Sport, then Iris' customer, a mafioso. Iris, hysterical with fear, pleads with Travis to stop the killing. Instead, Travis kills the brothel's bouncer in front of her with his last bullet. Unable to commit suicide after the firefight, Travis resigns himself to sitting on a sofa next to Iris in her room. When the police arrive, he mimes shooting himself with his index finger.
Travis' shootout is seen by the police and press as an attempt to rescue Iris from armed gangsters. He is not prosecuted, and is hailed as a local hero in the press. He receives a letter from Iris' father, thanking him for saving her and revealing that she has returned home to Pittsburgh, where she is going to school. After weeks of recovery and a return to work as a taxi driver, Travis encounters Betsy as a fare. Travis drives her home, then refuses to let her pay the fare, driving away with a smile. As Travis drives off, he becomes suddenly agitated after noticing something in his rear-view mirror.