As a boy, Donewicz's mother always told him stories about "the angels," the superheroes of Astro City. Although he looked up to the city's heroes, Donewicz eventually fell into the prevalent gang life of Kiefer Square as a teenager. Donewicz is hardly in it for the violence, but all the same, he accidentally kills a rival gang member and is overwhlemed by feelings of panic and guilt.
When Donnelly Ferguson tells Donewicz that a scientist, Dr. Ganss, is making people into superheroes, he agrees to steel for Ganss in exchange for superpowers that will help him stay out of prison. Thus begins the criminal carreer of the Steel Jacketed Man, or Steeljack, as he is eventually called.
Steeljack drifts in and out of prison for 20 years until he decides to go on the straight and narrow and move back to his old neighborhood, Keifer Square. A combination of his super strength and criminal record make it difficult for him to get a job, and he slowly drifts towards Donnelly Ferguson, who now arranges jobs for retired/out of work supercriminals.
Donnely offers Steeljack a job that's not so illegal (although it violates his parole to even be around other former supercriminals ): to find the Black Mask Killer, the person who's been killing the other supercriminals of Kiefer Square.
Steeljack tries the detective game, interviewing the deceased criminals' families. When the trail first runs cold, Ferguson takes him to see an aged Esteban Rodrigo Suarez Hidalgo, El Hombre, to help him get perspective. Hidalgo recounts to Steeljack his great career as a hero, how he trained his sidekick, Bravo, and how his focusing on petty things, such as his waning popularity, led him to his greatest embarrassment. Hidalgo tells him how he paid The Assemblyman, a criminal scientist, to build a robot and instruct it to attack Los Angeles so he could swoop in, armed with a remote designed to shut down the robot, and save the day, hopefully regaining his former popularity. The scientist has other plans, however. The robot created much devastation and lives were lost when the remote El Hombre was given proves worthless. When Honor Guard finally defeat the robot and track down the scientist, he tells them all about El Hombre's plan. Disgraced by his partner, Bravo leaves to start the Irregulars. El Hombre retires to Astro City, though he still follows Bravo's exploits in the newspapers. The aged Hidalgo's recounting of these events conveys to Steeljack that the good can go bad just as easily as the bad can be good again, and that the fallen black masks of Kiefer Square deserve justice.
Steeljack thinks he's solved the case when the Mock Turtle crash lands in the Square being chased by other supercriminals. Steeljack thinks it's these criminals that have been killing the others, and along with the Square's residents, defeats the pursuers with overwhelming success. When Mock Turtle turns up dead, he realizes the mystery is still unsolved and quits the job, feeling inadequate. He chooses to find menial work instead, and tries to forget the whole ordeal.
When Steeljack accepts another job from Ferguson, he meets the Conquistador, and it all clicks. In a plot to relaunch his hero career (now as El Guerrerro), Hidalgo plans to kill even more black masks as the Conquistador, and then defeat his own villainous self as this new hero. Steeljack breaks into the Honor Guard's hideout to tell them what Hidalgo is plotting, but they don't believe him, partially due to the testimony of a still disgruntled Bravo, who's in denial about his former partner's insanity. When Quarrel attempts to take him to jail, Steeljack escapes to face the Conquistador himself. Steeljack manages to keep the fight up long enough for Honor Guard to arrive and take down Hidalgo, who is taken away to an asylum. Out of respect for Bravo, and the hero Hidalgo once was, Honor Guard chooses to keep Hidalgo's role in the matter a secret from the public.
In gratitude for saving their relatives, the citizens of Kiefer Square give Steeljack the job of caretaker of the Kiefer Square Cemetery, where he frequently visits both the graves of his mother and the kid he murdered as a teenager. His greatest achievement comes when he is finally able to buy a nice tombstone for his mother, one with a large statue of an angel.