Billy Hope (Jake Gyllenhaal) is an undefeated professional boxer living in New York City with his wife Maureen (Rachel McAdams) and their daughter Leila (Oona Laurence). During a match in which he defends his World Light Heavyweight title, Billy sustains an eye injury and is convinced by Maureen to retire while he's at the top. At a charity event for the orphanage where he and his wife both grew up, Billy is taunted by an up-and-coming boxer, Miguel "Magic" Escobar, leading to a brawl in which Maureen is accidentally shot and killed by Miguel's brother Hector, who flees.
Billy begins abusing alcohol and drugs while obsessively searching for Hector. He eventually gets a tip of his whereabouts, but finds only his drug-addict wife Maria (Rita Ora), and leaves after learning Hector is a father. After attacking a referee out of frustration after losing a fight, Billy is suspended and left indebted, leading to his house and belongings being repossessed. He continues to spiral out of control and nearly dies after crashing his car while driving intoxicated, which also causes him to lose custody of Leila, who is put under care of Child Protective Services officer Angela Rivera (Naomie Harris). The incident drives Billy to become sober, but Leila cuts ties with him, blaming him for their predicament.
At the behest of friends, Billy gets a job at a gym owned by seasoned boxer, Titus "Tick" Wills (Forest Whitaker), and eventually convinces Tick to become his trainer. Billy's former manager Jordan Mains (50 Cent), who is currently managing Miguel, arranges a fight between the two that could put Billy back in the spotlight. Tick is reluctant to train Billy, fearful he might be blinded by his vendetta against Miguel, but is motivated to do so when another of his students is killed by his abusive father while attempting to defend his mother.
Leila is reluctant to forgive her father, but she is allowed to watch the fight by closed circuit in the locker room with Angela. As the match begins, Miguel has the upper hand against Billy, but, with Tick's advice, Billy has the chance to turn the tables in the final round by using the Philly shell defense and countering more aggressively with his left. As the round reaches its final minute, Billy pivots hard and, although fighting from a traditional stance, delivers a powerful left uppercut (southpaw, from which the film takes its title) which sends the champion down to the ground. Miguel manages to get up before the count is over and is saved by the bell. Billy is declared the winner by a split-decision and reunites with Leila in the locker room, where she forgives his past mistakes and they embrace.