Catalina betrays Claude during a bank robbery. She shoots him and leaves him for dead. Claude is arrested, recovers and sentenced to prison for ten years. Catalina stops robbing banks, turning to the dealing of SPANK instead.
The Colombian Cartel attacks the prison convoy to help a elderly Asian man escape. Thanks to this coincidence, 8 Ball and Claude manage to escape, too. The Cartel leaves a bomb on the Callahan Bridge to make their getaway, leaving the Callahan Bridge severely damaged.
8 Ball helps Claude to get of the streets and introduces him to Luigi Goterelli, who is affiliated with the mafia family Leone.
Claude meets several other Leone's, including Joey Leone, Toni Cipriani, the don himself, Salvatore Leone, and his wife, Maria Latore
Under orders of Salvatore, Claude and 8 Ball blow up a boat used by the Colobian Cartel to produce SPANK.
Maria falls in love with Claude and tells this to Salvatore. Salvatore, already paranoid with Claude, attempts to kill Claude by sending him to pick up a rigged car. Maria warns Claude and brings him to her friend Asuka Kasen.
The Callahan Bridge is repaired.
The Staunton Lift Bridge malfunctions, isolating Staunton Island and Portland from the mainland.
Asuka asks Claude to kill Salvatore, to prove he has broken his ties with the mafia.
Claude meets Ray Machowski. Ray has changed much in three years: he is as corrupt as his partner Leon McAffrey used to be and has become incredibly paranoid.
Claude meets Phil, who now lives in Liberty City and claims to have lost his arm in the war in Nicaragua. Claude helps him to fend of an attack of the Colombian Cartel.
Ray sends Claude to kill McAffrey. Claude fails the first time, but succeeds in another attempt.
Claude meets Donald Love.
Donald Love asks Claude to kill Kenji Kasen with a Cartel Cruiser, to make the Yakuza believe it was the Colombian Cartel.
The Staunton Lift Bridge is repaired and the last segment of the Porter Tunnel is completed.
Claude encounters Catalina and Miguel when he is retrieving a package for Donald Love. Catalina escapes, leaving Miguel behind. Miguel is captured by Asuka and Maria, who tortures him because she thinks the Colombian Cartel killed her brother. She interrogates him during the torture.
Donald Love leaves the city without a trace.
Asuka and Miguel are killed when the Colombian Cartel when they discover their hide-out. A note from Catalina tells Claude she has kidnapped Maria, and that he has to pay ransom if he wants to see her again.
Claude pays the ransom, but Catalina orders Claude to be killed and leaves with a helicopter. Claude escapes and goes in pursuit. He follows the chopper to the Cochrane Dam, where he kills several Colombians. He eventually shoots the helicopter down with a rocket launcher, killing Catalina.
Claude supposedly kills Maria when she keeps on nagging.