As in the novel, Jack Ryan is appointed Central Intelligence Agency (CIA) Acting Deputy Director and discovers that he is being kept in the dark by colleagues who are conducting a covert war against drug lords in Colombia.
Jack Ryan (Harrison Ford), meanwhile, is appointed Deputy Director (Intelligence) when his friend, mentor, and boss Admiral James Greer (James Earl Jones) is diagnosed with an aggressive, and ultimately fatal, case of pancreatic cancer. Upon his appointment, Ryan is asked to go before the United States Congress to request increased funding of $70 million for ongoing CIA intelligence operations in Colombia. Congress agrees to provide the funding, with Senator Mayo receiving Ryan's word that "no troops" or black-ops will be used in Colombia. Needing to keep an unwitting Ryan out of the loop, Cutter turns to CIA Deputy Director of Operations Robert Ritter, who secures a document giving him permission to do what he sees fit to take down the cartel. Ritter then assembles a black-ops team with the help of John Clark (Willem Dafoe), a secret field operative. John and his team travel to Colombia and begin destroying the various Cartel gangs, their equipment and hidden drug lab facilities.
The head of one of the drug gangs, Ernesto Escobedo, is enraged at having lost over $600 million as a result of the freezing of assets, and has his main operative, Felix Cortez (Joaquim de Almeida), take care of the problem. Felix, a former Cuban intelligence officer, happens to have an unwitting contact inside the U.S. government - Moira Wolfson, a secretary to Federal Bureau of Investigation (FBI) Director Emil Jacobs. Felix feigns romantic interest and uses Moira, who doesn't know of his true nature or intentions, to discover that Jacobs is visiting Colombia to negotiate with the local attorney general concerning the frozen money. Unaware of these covert dealings, Ryan finds himself caught in the middle of an assassination attempt on Jacobs, from which only Ryan survives. Felix travels to the United States and kills Moira under pretense of a romantic weekend getaway. Felix's real motivation is to cause distrust among the leaders of the Cartel (as none of them knows who ordered the ambush of the FBI Director). Felix also believes he can assume control of the cartel himself following the inevitable gang war that will result.
In retaliation for the assassination of Jacobs, Cutter orders the aerial bombing of a villa where all of the Cartel's leaders are supposed to meet to sort out the recent development. The bombing is mostly successful, killing a large number of the Cartel leaders and fooling the media and other observers into thinking that the destruction was caused by a car bomb set by a rival drug lord. However, Escobedo and Cortez happen to be running late. They avoid the bombing, but innocent women and children are also killed in the action, much to Cutter's dismay. The situation is exacerbated when Ryan and Cortez independently discover that the United States was responsible for the bombing.
Felix uses this knowledge to broker a deal with Cutter. Felix will assassinate Escobedo and take over the Cartel, then reduce drug shipments to the U.S. and allow the FBI to arrest some of his workers at regular intervals so as to make the U.S. appear to be winning the drug war. In exchange, Cutter will shut down all operations in Colombia and allow Cortez to capture and kill Clark's soldiers. Cutter agrees and orders Ritter to get rid of all evidence of their operations and cut off the troops in Colombia from all support.
Meanwhile, Ryan is told about this meeting between Cutter and Cortez. With some help, he hacks into Ritter's computer and discovers Ritter's and Cutter's work in Colombia. Ritter notices Ryan's presence on the computer while he deletes all of the files, and the two men soon confront each other. Ritter tells Ryan that he has written permission from the President to do anything necessary to defeat the Cali Cartel, and so does Cutter. That means that Jack will be the scapegoat for what has been happening since he doesn't have that protection and was responsible for the increased funding from Congress that made the Colombian operations possible.
Ryan is now informed that Greer has succumbed to cancer in hospital. As the funeral takes place, the black-ops team is ambushed in Colombia. After finding out, he decides to go to Colombia by himself in secret to find John Clark and save the soldiers. However, Ritter and Cutter find out about this and tell Clark (who is angry over the communications cut-off from his men) that Ryan was responsible for the operations' shut-down. Clark vows to kill Ryan, and almost does before Ryan convinces him that Ritter and Cutter are responsible.
Clark hires a local retired American pilot and Ryan buys a UH-1 Huey helicopter from a local owner using CIA money. They fly to where the soldiers were attacked and find the squad's scout/sniper, Domingo Chavez, who tells them that two of his unit members are being held prisoner and the rest are dead. Ryan decides to visit Escobedo's mansion and tell him (using the evidence from Cutter's meeting with Cortez) what Cortez has been doing. Enraged, Escobedo calls Cortez in and accuses him of treachery. One of Felix's men kills Escobedo and henchmen, but is shot by Chavez. Ryan, Clark, and Chavez then rescue the prisoners, kill Cortez, and escape.
Back home, Ryan angrily confronts the President, who was indirectly responsible for all the carnage. The President smugly tries to convince Ryan that he now holds 'a chip in the big game' - by being in the loop of what happened, Ryan can use the President for special favors, in return for keeping the debacle secret. But the late Admiral Greer would be the scapegoat instead. Ryan is unable to bear dishonoring the black-ops team who died in the raid, the innocent civilians (whom Cutter called "collateral damage") who died from the aerial bomb at the villa and the legacy of his mentor. He angrily tells the President that he intends to blow the whistle at a Congressional Oversight Committee session despite the damage it could do to his career. He then walks out of the Oval Office, and the movie ends with Ryan beginning his testimony to Congress.
The film also takes a few cinematic shortcuts: people die instead of suffering more complex consequences of their acts. There are also further more differences:
During the rescue operation, the film crew helicopter is visible in the window of the Kiowa helicopter that Ryan had bought.
The final honors at Arlington National Cemetery are not in the correct order nor complete for what a US Navy Admiral would receive. The portrayal was backwards and lacked the gun salute to which a flag officer is entitled.