Kira, a Greek muse incarnated on Earth to inspire people, helps Dan McGuire and an artist named Sonny Malone to meet. She inspires them to build a huge disco roller rink called Xanadu.

Prominent gang leader Cyrus calls a meeting of New York's gangs to set aside their turf wars and take over the city. At the meeting, a rival leader kills Cyrus, but a Coney Island gang called the Warriors is wrongly blamed for Cyrus' death. Before you know it, the cops and every gangbanger in town is hot on the Warriors' trail.