Mafia is set in the 1930s, between the fall of 1930 through to the end of 1938, during the later part of Prohibition, which ended in 1933. The game is set in the fictional American city of Lost Heaven (loosely based on New York City, Philadelphia and Chicago of the same time period).

The player takes the role of taxi driver Thomas "Tommy" Angelo, who, while trying to make a living on the streets of Lost Heaven as a taxi cab driver, unexpectedly and unwillingly becomes involved in organized crime as a driver and enforcer for the Salieri crime family, led by Don Ennio Salieri.