In Liberty City, Miami at the height of the crack epidemic, Afro-Cuban drug dealer Juan finds Chiron, a withdrawn child who goes by the nickname “Little,” hiding from a group of bullies in a crackhouse. He lets Chiron spend the night with him and his girlfriend Teresa before returning Chiron to his mother Paula, who revokes his TV privileges as punishment for worrying her. Chiron continues to spend time with Juan, who teaches him how to swim and mentors him, telling him he can choose his own path in life. One night, Juan encounters Paula smoking crack with one of his customers. Juan berates her for being addicted and for neglecting her son, but she rebukes him for selling crack to her in the first place; all the while, they argue over Chiron’s upbringing. She implies that she knows why Chiron gets tormented by his peers, alluding to “the way he walks” before going home and taking out her frustration on Chiron. The next day, Chiron admits to Juan and Teresa that he hates his mother and asks what a “faggot” is. Juan tells him it is “a word used to make gay people feel bad.” He tells Chiron there is nothing wrong with being gay and that he should not allow others to mock him. Chiron then asks Juan whether he sells drugs and whether his mother does drugs and leaves after Juan sadly answers yes to both questions.
Now a teenager, Chiron juggles avoiding school bully Terrel and spending time with Teresa, who has lived alone since Juan’s death. Paula, who has turned to prostitution due to her worsening addiction, forces Chiron to give her the money he receives from Teresa. Chiron’s childhood friend Kevin tells him about a detention he received for being caught having sex with a girl in a school stairwell, and Chiron later dreams about Kevin and the girl having sex in Teresa’s back yard, waking with a start. One night, Kevin visits Chiron at the beach near his house. While smoking a blunt together, the two discuss their ambitions and the nickname Kevin gave Chiron when they were children. They kiss, and Kevin masturbates Chiron. The next morning, Terrel manipulates Kevin into participating in a hazing ritual. Kevin reluctantly punches Chiron until he cannot stand watching as Terrel and other boys savagely attack him. When the principal urges him to reveal his attackers’ identities, Chiron refuses, saying that reporting them will not solve anything. The next day, an enraged Chiron walks into class and smashes a chair over Terrel’s head. The police arrive and arrest Chiron for assault, and he is sent to juvenile hall.