Travis Bickle, un jeune homme du Middle West a récemment été démobilisé des marines. Il en ressort une personnalité déséquilibrée et un individu refoulé, en marge de la société. Souffrant d'insomnie, il décide de prendre un travail de chauffeur de taxi à New York et se porte volontaire pour un travail de nuit. Bickle passe son temps libre à regarder des films pornographiques dans des cinémas sordides, et à rouler sans but dans son taxi.
Travis Bickle (De Niro) is a lonely and depressed young man and former-Marine living in Manhattan. He occasionally corresponds with his parents by mail, deceiving them into believing that he's living a healthy and successful life as a government employee. He refuses to send them his home address by telling them that it would interfere with the secrecy of his fabricated job. He becomes a night time taxi driver in order to cope with his chronic insomnia, working 12-hour shifts nearly every night, carrying passengers around all five boroughs of New York City. His restless days, meanwhile, are spent in seedy porn theaters. He keeps a diary, excerpts from which are occasionally narrated via voice-over during the film. Bickle claims to be an honorably discharged Marine, and it is implied that he is a Vietnam veteran; he keeps a charred Viet Cong flag in his squalid apartment and has a large scar on his back.
Bickle develops a romantic attachment to Betsy (Cybill Shepherd), a campaign volunteer for New York Senator Charles Palantine (Leonard Harris). Palantine is running for President on a platform of dramatic social change. After watching her from his taxi through the windows of Palantine's campaign office, Bickle enters the office asking to volunteer as a pretext to talk with Betsy. Bickle convinces her to join him for coffee, and she later agrees to let him take her to a movie. She says he reminds her of a line in Kris Kristofferson's song "The Pilgrim, Chapter 33": "He's a prophet and a pusher, partly truth, partly fiction–a walking contradiction." On their date, Bickle takes her to see Language of Love, a Swedish sex education film. Offended, she leaves the movie theater and takes a taxi home alone. The next day he tries to reconcile with Betsy, phoning her and sending her flowers, to no avail.
Bickle's thoughts begin to turn violent. The only person in whom he vaguely confides his new views and desires is fellow taxi driver "Wizard" (Peter Boyle), who tells Travis that he's seen all kinds in his time driving cabs, and he believes Travis will be fine. Disgusted by the petty street crime (especially prostitution) that he witnesses while driving through the city, he now finds a focus for his frustration and begins a program of intense physical training. He buys four pistols, a .44 Magnum Smith & Wesson Model 29 revolver, a .38 Smith & Wesson Model 36 revolver, a .22 Smith & Wesson Escort pistol, and a .380 Astra Constable pistol, from an illegal dealer, Easy Andy (Steven Prince). Bickle then constructs a sliding action holster for his right arm and practices concealing and drawing his weapons. Bickle begins talking to himself as he looks in the mirror and draws his gun (asking repeatedly, "you talkin' to me?"). He develops an interest in Senator Palantine's public appearances. One night, Bickle enters a run-down grocery just moments before a man attempts to rob the store. Bickle shoots the man in the neck. The grocery owner (Victor Argo) encourages Bickle to flee after he expresses worry for shooting the man with an unlicensed gun. As Bickle leaves, the store owner repeatedly clubs the near-dead man with a steel pole.
On another night, Iris (Jodie Foster), a 12-year-old child prostitute, enters Bickle's cab, attempting to escape her pimp, "Sport" (Harvey Keitel). When Bickle fails to drive away, Sport drags Iris from the cab and throws Bickle a crumpled twenty-dollar bill. Bickle later meets Iris in the street and pays her for her time, not to have sex, but to try and convince her to quit prostitution. They meet again the next day for breakfast and Bickle becomes obsessed with helping Iris leave Sport and return to her parents' home.
Bickle sends Iris several hundred dollars attached to a letter telling her he will soon be dead. After shaving his head into a Mohawk haircut, he attends a public rally where he attempts to assassinate Senator Palantine. Secret Service agents notice him approaching and Bickle flees. He returns to his apartment, then drives to Alphabet City, where he and Sport get into a confrontation in which the two insult each other. Bickle shoots Sport in the gut, then storms into the brothel and kills the bouncer. After the wounded Sport shoots Bickle in the neck slightly wounding him, Bickle shoots him dead, as well as Iris's mafioso customer. Bickle is shot several times. Kneeling on the floor of Iris's room, he attempts several times to fire a bullet into his own head, but all his weapons are out of ammunition, so he resigns himself to resting on a sofa until police arrive.
The film's dénouement reveals Bickle recuperating. He has received a handwritten letter from Iris's parents who thank him for saving their daughter, and the media hail him as a hero. Bickle returns to his job, and encounters Betsy as a fare. She discusses his newfound fame, but he denies being a hero. He drops her off without charging her. As he drives away, he hears a small, piercing noise which prompts him to stare at an unseen object in his taxi's rearview mirror.