When a bomb explodes at the Bonwit Teller department store, a man calling himself "Simon" phones Major Case Unit Inspector Walter Cobb at the police station and claims responsibility for the bomb. He orders suspended police officer Lt. John McClane to walk through the middle of Harlem, in his underwear, wearing a sandwich board with the slogan "I hate Niggers" on it. McClane is driven there by Cobb and three other officers. Harlem electrician Zeus Carver spots McClane and tries to get him off the street before he is killed, but a gang of black youths attacks McClane and Carver, who barely escape. Returning to the station, McClane and Carver learn that Simon is likely in possession of several gallons of a bio-chemical agent explosive stolen the night before. Simon calls the station again and demands McClane and Carver put themselves through a series of "games" to prevent any more explosions. McClane is forced to lie to Carver to gain his trust.
One of Simon's games require McClane and Carver to travel to the Wall Street subway station, over 70 blocks away, within 30 minutes to stop a bomb on it. Though McClane manages to get aboard the train, identify the bomb, and throw it off the train car, Simon still ignites the bomb, ravaging much of the station but without any fatalities thanks to McClane and Carver. The two are met by FBI agents that have identified Simon as Simon "Peter" Gruber, the brother of Hans Gruber, who was killed by McClane in the first film, and several of his cohorts. During the debriefing, Simon calls into the group and warns that another bomb has been planted in one of New York's City schools, and that any police radio could set it off. As McClane and Carver are forced to complete more games to identify the school, the police organize a massive search of every school, forcing the teams to rely on telephone communications.
McClane, while playing at Simon's games, realizes that something is wrong and returns to Wall Street while Carver continues to follow Simon's instructions. McClane finds Simon's men have raided the Federal Reserve Bank through the ruined subway system, making off with $140 billion of gold bullion from the vault, hauling it away in dump trucks. McClane attempts to follow the dump trucks through the aqueduct, but Simon destroys a cofferdam and floods the tunnel; McClane escapes and regroups with Carver. They continue to follow the dump trucks to a tanker, and make a daring attempt to board it, but are quickly caught. At the same time that the police attempt to evacuate the school they think the bomb is in, McClane and Carver find that Simon has instead used the rest of the explosive to rig the tanker to explode, which would send the gold to the bottom of the sea. After Simon leaves, McClane and Carver escape the doomed tanker just before the bomb is detonated.
As they regroup with the police and have their wounds tended to, McClane reveals that there was no gold on the ship, as it was replaced with scrap metal, and Simon has likely gotten away. Carver prompts McClane to call his estranged wife Holly, but while on line with her, discovers that an aspirin bottle given to him by Simon identifies a nearby border town in Quebec. McClane leads a raid along with the Royal Canadian Mounted Police on a warehouse where Simon and his men have started to distribute the gold. Simon attempts to escape on a helicopter and shoot down McClane, but McClane is able to fire upon a power line, severing it onto the helicopter and destroying it. Carver joins McClane and convinces him to finish his call to Holly at a nearby pay phone.
Where does McClane go after realizing something is wrong?
Wall Street