In Roth's suite, he is being treated by a local doctor whom he distrusts: "I don't trust a doctor who can't speak English." Mrs. Roth shakes hands with Michael, calling him by his adopted alias, Mr. Paul, after the attempt on his life. The crafty Jewish kingpin, with his shirt off while lying on the sofa, is worried and suspects that Michael is pulling out of the deal. Intuitively (or because of a traitor in their midst), he knows that there is "a bag full of money" brought by Fredo - and Roth suspects that Michael might hold back:

Roth: My sixth sense tells me your brother Fredo brought a bag full of money. Where is it? You're pulling out?
Michael: Just wanna, I just wanna wait. How do you feel?
Roth: Terrible. I'd give four million just to be able to take a piss without it hurting.
Michael: Who had Frank Pentangeli killed?
Roth: The Rosato brothers.
Michael: I know. But who gave the go-ahead? I know I didn't.

To answer the question, the treacherous Roth coldly speaks about retaliatory killing in an incident recalling Moe Greene's death [Greene was assassinated by Michael's orders in the first film], interspersed by slight coughing. From Michael, Roth demands two million for his business partner, the Cuban dictator:

There was this kid that I grew up with. He was younger than me...We did our first work together. Worked our way out of the street. Things were good. We made the most of it...in Prohibition, we ran molasses into Canada. Paid a fortune, your father too. As much as anyone, I loved him and trusted him. Later on, he had an idea to build a city out of a desert stopover for GI's on their way to the West Coast. That kid's name was Moe Greene and the city he invented was Las Vegas. This was a great man, a man of vision and guts and there isn't even a plaque or a signpost or a statue of him in that town. Someone put a bullet through his eye. No one knows who gave the order. When I heard it, I wasn't angry. I knew Moe, I knew he was headstrong, talking loud, saying stupid things. So when he turned up dead, I let it go. And I said to myself, this is the business we've chosen. I didn't ask who gave the order because it had nothing to do with business. The two million in a bag in your room. I'm going in and take a nap. When I wake, (and) the money's on the table, I'll know I have a partner. If it isn't, I'll know I don't.

At the Tropicana Nightclub stage show that evening, Fredo is seated with his party including Senator Geary from Nevada and other government officials (Senator Payton from Florida, Senator Ream from Maryland, Judge DeMalco from New York, and a representative from UTT). Fredo lies when Michael introduces him to Johnny Ola - confirming Michael's suspicions about his brother:

Michael: Johnny! You don't know my brother Fredo, do you, Johnny? Johnny Ola - Fredo.
Johnny: (holding out his hand to Fredo) We never met. Johnny Ola.
Fredo: (nervously) Pleasure.

At another late-night, sleazy dive establishment where kinky, live sex acts are performed, the businessmen are led by Fredo ("You're not gonna believe this") to join other tourists who stand on different levels around a circular performance area. Senator Geary has his arms around a "red-headed Yolanda" - a prostitute. Fredo bets Senator Geary $50: "You're not gonna believe this" - (and later wins). A 'virgin' is dragged forward by slave girls dressed in black and tied to a post. A 'superman' is also brought forward by two other woman and thrown on the ground in front of the slave girl. After standing and dropping his long red cape from his shoulders, the crowd gasps at his enormous sex organ (shown off-screen): "That things' gotta be fake!":

Fredo: That ain't no fake, that's real. That's why they call him Superman.
Geary: Hey, Freddie, Freddie, where did you find this place?
Fredo: (boisterously) Johnny Ola told me about this place. He brought me here. I didn't believe him, but seein' is believin', huh?...Old man Roth'd never come here, but old Johnny knows these places like the back of his hand. Now watch him, he's gonna break the cracker with it.
Geary: Break a cracker! I want to see him break a brick. He could knock down a building.

Michael reacts - he shoots an all-knowing glance at Fredo - his lying, traitorous brother. He turns back to his bodyguard and signals him. He looks down at the floor with his hand covering his face. Soon after on Hyman Roth's hotel balcony, Michael's bodyguard strangles Johnny Ola with a coat hanger. He also follows after Roth as he is taken to the hospital by an ambulance, noting the room where Roth is wheeled into.

The Cuban President celebrates New Year's Eve with a fancy ball in the Presidential Palace. Geary is confident of American business investments in Cuba - over $1 billion: "...I don't believe that President Eisenhower will ever pull out of Cuba, not as long as we have over one billion dollars invested. The American public believe in non-intervention." An entourage of Military Police marches across the ballroom, past the partygoers and dancing couples and into a room where the President is standing. In Roth's hospital room, the bodyguard takes advantage of the New Year's Eve celebration when the attending nurse leaves the room to help share in the opening of a bottle of champagne. Soldiers suddenly and mysteriously appear in the hallway [were they warned?] - and burst into Roth's room, finding the bodyguard attempting to smother Roth with a pillow. The bodyguard is mortally wounded through the pillow with five shots and falls back against the bloodied wall.

Back in the ball room, the guests cheer the coming of the New Year - it becomes 1959. Everyone cheers, embraces, and throws confetti into the air. Michael whispers into Fredo's ear as they grab each other:

There's a plane waiting for us to take us to Miami in an hour, all right? Don't make a big thing about it. (He forcefully grabs him on both sides of the face and kisses him - Sicilian style. It is the kiss of death on his lips.) I know it was you, Fredo. You broke my heart. You broke my heart.

Frightened, Fredo frees himself, breaks away, and walks out of the dance hall. Fireworks are discharged outside, and everyone is reveling in the streets. The streets are jammed with military vehicles. The Cuban president addresses the guests in Spanish:

Due to serious setbacks to our troops in Guantanamo and Santiago, my position in Cuba is untenable. I am resigning from office to avoid further bloodshed. And I shall leave the city immediately. I wish all of you good luck.

The crowd is whipped up by the revolution led by Fidel Castro's guerrilla army, and others scramble for safety. From his car, Michael calls to Fredo, who is walking in a daze, and mistakenly tells him that Roth is dead: "Come on. Come with me. It's the only way out of here tonight. Roth is dead. Fredo. Fredo! Come with me. You're still my brother!" Fredo runs the other direction. A massive evacuation is in progress - there is pandemonium as people run to the docks to board boats, rebels rush into buildings to loot and smash parking meters in the street, and crowds gather outside the US Embassy gates. The rebels chant: "Fidel, Fidel, Fidel..." To escape Roth's assassination plot against him, Michael flees to the airport.

Michael returns to Nevada but before going to his Tahoe estate, he meets with Tom Hagen in his Las Vegas Desert Inn hotel suite. During his absence over the Christmas and New Year's holidays, his boy was given "a little car with an electric motor that he can ride in"; "Roth got out on a private boat; he's in a hospital in Miami - had a stroke but he recovered OK"; "Your bodyguard's dead"; "(Fredo) he got out, he must be somewhere in New York"; and "Kay had a miscarriage - she lost the baby...at three and a half months." Michael wants Tom to reestablish contact with Fredo: "I want you to get in touch with him. I know he's scared. Tell him everything is all right, tell him I know Roth misled him, that he didn't know they were gonna try to kill me."

PROLOGUE:

The film dissolves into a scene in Vito's apartment at night, where the distressed parents care for their ailing, crying baby Fredo, who has pneumonia. A midwife places a glass tumbler on the baby's chest with a lit flame inside - a folk remedy. Vito is on his rounds as a petty thief, driving a truck full of 'hot' dresses through New York's city streets. Fanucci jumps onto the vehicle's running board and threatens the profitable business that he has developed with his friends:

Young man, I hear you and your friends are stealing goods....This is my neighborhood. You and your friends should show me some respect. You should let me wet my beak a little. I hear you and your friends cleared $600 each. Give me $200 each, for your own protection. And I'll forget the insult. You young punks have to learn to respect a man like me! Otherwise the cops will come to your house. And your family will be ruined. Of course, if I'm wrong about how much you stole - I'll take a little less. And by less, I only mean - a hundred bucks less. Now don't refuse me. Understand, paisan?

In Vito's flat that evening over a spaghetti dinner, he speaks [with Brando's characteristic gravely voice] to young Tessio (John Aprea) and Clemenza about whether to pay the local boss $600 bucks. Although they are fearful of Fanucci's connections to the cops, Vito believes that they don't have any obligation to be his puppet: "He's one person, we're three. He's got guns, we've got guns. Why should we give him the money we sweated for?" The deceptively mild-mannered Vito instructs them to ask no questions, and decides that he will be able to "reason with" and persuade Fanucci to "take less." During the Italian religious fiesta of San Gennaro the next day that is celebrated as a street festival, Clemenza stops by a street vendor's cart and buys an ethnic hotdog (while the National Anthem plays). He and Tessio each give $50 to Vito (for $150 total instead of $200 demanded from each of them) for their part of the contribution:

Clemenza: His family's out of the house. Fanucci's alone in the cafe.
Tessio: Vito, here's my fifty dollars - Buona fortuna (good luck).
Clemenza: Hey Vito, are you sure he's going to go for it?
Vito: I make an offer he don't refuse. Don't worry.

In a cafe, Fanucci accepts the folded money placed under his hat - actually only $100. He is amazed by the man's "guts" ("You've got balls, young man!") for asking for "a little time" because he's "out of work." He pinches Vito's cheek as he leaves - Vito wipes his cheek with disgust.

In a masterfully-edited sequence leading up to a momentous climax, Fanucci walks along the jammed street between booths, appropriating an orange from a vendor's cart, receiving kisses on his hand by a passing man, and accepting a necklace. Vito stalks him along the rooftop toward his apartment, as the religious procession is in progress below. The boss watches a puppet show (with two knight puppets and a lady) - when the two knights begin to fight, he mutters: Forzzelando! Oh, this is too violent for me!"

After jumping from one rooftop to another in his pursuit, Vito reaches Fanucci's apartment building. He finds a concealed, wrapped cloth (with gun) in a chimney and enters from the roof. As Fanucci ascends the stairs to his apartment, Vito descends one flight of stairs and loosens the light in its socket outside the man's apartment - he also positions the cloth over his gun to quiet it. The outdoor procession in the festival has stopped in front of the San Rocco building. The priest recites in Latin to the crowd: "In nomine Patris, et Filii, et Spiritu Sancti amen." When he is about to unlock his door, Fanucci notices that the light bulb has been turned off in the hallway - he taps it and when the light flickers, he tightens it. The light reveals Vito hidden in the shadows. Vito follows him through the door with his wrapped gun. Fanucci turns with surprise and asks: "What've you got there?"

Vito makes good on his threat on Fanucci's life - "an offer he don't refuse." His first killing is a sacramental murder, occurring in conjunction with the religious festival in the streets. When Fanucci is shot once in the chest (fireworks explode outside), he tears off his vest to inspect the wound. He is then shot again point-blank in the cheek, trembles, and collapses to the floor. Vito shakes off the flaming towel from his arm, and then kneels and places the muzzle of the gun in Fanucci's open mouth and pulls the trigger a third time. He steals the blackmailer's wallet and then pushes the body over with his foot.

Outside on the rooftop, Vito throws away the cloth, takes the cash out of Fanucci's wallet, smashes the gun into pieces, and drops them down vent pipes and chimneys. Celebrants in the crowd hug each other - fireworks explode and hats are tossed into the air. Vito mingles with the crowd and with a completely composed demeanor, he joins his wife and their three children sitting on their brownstone tenement's front stoop: Sonny, Fredo, and Michael. He holds his baby Michael in his arms: "Michael, your father loves you very much." [It is chronologically impossible for Michael to have been alive. Vito kills Fanucci in 1919, and Michael was born in 1920.]

[Originally, an intermission was planned at this point in the film.]

SEQUEL:

Michael's car is driven through the snow into his Tahoe compound. He walks through the snow-covered grounds, pausing to look at the electric car that Anthony received as an absentee Christmas gift. The house appears empty and cold, but he finally finds Kay working at a sewing machine in one of the rooms. She doesn't notice him standing in the doorway, and he doesn't reveal himself.

As he turns away, the scene switches to the interior of a Senate Committee Hearing Room [based upon the McClellan committee hearings. This is the first of three hearing sequences in the film in the year 1959 - including the testimonies of Willi Cicci, Michael, and Frankie Pentangeli]. Chairman (William Bowers) interrogates Willi Cicci, a "button" man (or former "soldier") for the "Corleone crime organization" [modeled after real-life gangster Joe Valachi]:

Chairman: ...you were a member of the Corleone crime organization.
Cicci: No. We called it the Corleone Family, Senator. We called it the Family.
Chairman: What was your position?
Cicci: At first, like everybody else I...I was a soldier.
Chairman: What is that?
Cicci: A button, you know, Senator, come on.
Chairman: No, I don't know. Tell me.
Cicci: Well, when the boss says push a button on a guy, I push a button. See, Senator?

The committee wishes to find evidence that the head of the family, Michael Corleone, gave orders directly to Cicci to "push a button." Senator Geary nervously protects his indebtedness to the Corleone's by affirming only speculative theories, and helping to lead the witness to claim that he never took direct orders from Michael:

Chairman: Did you ever get such an order from Michael Corleone?
Cicci: No, I never talked to him.
Geary: Now, Mr. Cicci, could you amplify your answer a bit, please?
Cicci: Do what?
Geary: Could you expand on your answer? I'm particularly interested in knowing was there always a buffer involved? Someone in between you and your possible superiors who gave the actual order?
Cicci: Right , yeah, a buffer. The Family had a lotta buffers.

Michael strides through the snow to Mama's house on the Tahoe estate grounds. He passes a snow-covered children's playground. In front of a fireplace, he speaks to his Mama (in Sicilian) about his father's strength, changing times, and the feared loss of his family:

Michael: He was being strong...Strong for his family. But by being strong for his family, could he lose it?
Mama: You're thinking about your wife...about the baby you lost. But you and your wife can always have another baby.
Michael: No, I meant...lose his family.
Mama: But you can never lose your family.
Michael: Times are changing.

PROLOGUE:

Vito, now with a mustache, gradually becomes the new, prosperous godfather boss for his neighborhood. In his flat, a poor Italian widow named Signora Colombo (Saveria Mazzola), a friend of his wife's, asks for help after being evicted by her landlord for having a dog for her little boy. When the landlord found that she had hid the dog, he got mad and told her to leave permanently. Vito finds the pompous, well-dressed landlord Signor Roberto (Leopoldo Trieste) leaving a barbershop, and asks for reconsideration: "She's a poor widow, she has nobody to take care of her. She has no relatives, no money. All she has is this neighborhood." Although Roberto has already rented the place to another family for more rent, he mutters when Vito reimburses him with the six months' increase (a total of $30 - or $5 per month) in advance in his hands - and is then told to ask about Corleone's standing and prestige in the neighborhood:

Do me this favor. I won't forget it. Ask your friends in the neighborhood about me. They'll tell you I know how to return a favor.

At the Genco Olive Oil Co. Store, the legitimate front for Vito's illegal rackets and "import business," Roberto soon is groveling and apologizing after having asked around the neighborhood about Vito's reputation:

Roberto: What a misunderstanding! Holy Mary! Of course Signora Colombo can stay!
Vito: Grazie, grazie.
Roberto: Don Vito, I'm giving back the money you gave me. Un, due, three, four, five, six, tutt! Because after all, Don Vito, money isn't everything...Your kindness to that widow made me ashamed of myself. The rent stays like before. I'll even lower it. I'll lower it $5. I'll lower it $10.

As a sign is hoisted above their storefront: "GENCO IMPORTS," Genco proudly boasts of their new American opportunities: "Hey Vito, what do you think? God bless America. We're gonna make a big business."