A powerful figure in Italian politics who never goes anywhere without a team of police bodyguards, Lucchesi is the force behind the plot against Michael Corleone. Having worked with the corrupt Church officials Archbishop Gilday and Frederick Keinszig to drain the coffers of the Vatican Bank to the tune of several hundred million dollars, he now schemes to put it back before it can be missed by persuading Michael to purchase the Holy See's 25% share in Immobiliare, the world's largest real estate holding company, which will give Michael control of the board of directors.
Once Michael has transferred the money to the Vatican Bank, however, Lucchesi orders Gilday and Keinszig to stall the deal, claiming to be unable to ratify it without the signature of the Pope, who is gravely ill. Meanwhile, Lucchesi -- through his ally Don Altobello, a New York City Mafia chieftain who Michael believes is still his ally -- makes a deal with Joey Zasa, a traitorous caporegime in the Corleone family. In exchange for Altobello and Lucchesi's backing of his bid to become capo di tutti capi of the Five Families, Zasa agrees to have Michael killed. Although Zasa's assassination attempt -- a helicopter and submachine gun raid on a meeting of the Commission in Atlantic City, which leaves most of the bosses dead -- puts him in a position of power, he fails to kill Michael or his new protégé, Vincent Mancini. Shortly thereafter, Vincent (acting without Michael's knowledge) assassinates Zasa.
Soon thereafter, Michael, Vincent, and the rest of the family travel to Sicily. On Michael's instructions, Vincent presents himself to Altobello, claiming that he is dissatisfied with Michael and willing to defect. Altobello introduces Vincent to Lucchesi, who explains their whole scheme to him. As Vincent returns to Michael to tell him of the plot, Altobello (on Lucchesi's orders) travels to the small village of Montelepre, where he hires the veteran hitman Mosca to kill Michael. Although Mosca's first attempt on Michael's life is unsuccessful, he succeeds in killing Don Tommasino, the Mafia boss and old friend of Vito Corleone who served as Michael's protector in Sicily.
Days later, the Pope dies, and Cardinal Lamberto, a reformer and friend of Michael's, is elected Pope John Paul I. This frightens Lucchesi, who believes that the new Pontiff will authorize the Immobiliare deal, and also possibly fire Gilday and Keinszig and expose their criminal dealings. Lucchesi orders Gilday to arrange the Pope's death, by slipping some poison into his evening tea. Meanwhile, Michael has officially retired from the Mafia, passing the title of don of the Corleone family to Vincent, who makes ready take his revenge against Lucchesi and his coconspirators.
On Easter, as Michael and his family attend a performance of Cavalleria Rusticana by his son Anthony at the Teatro Massimo, Vincent simultaneously orders the assassinations of Lucchesi, Altobello, Gilday, and Keinszig. Lucchesi is the last to die. As he works in his office, Calo, the former bodyguard of Don Tommasino, arrives claiming to bear a message from Michael. After being thoroughly frisked for weapons, he is allowed to approach Lucchesi. Calo whispers to Lucchesi, "Power wears out those who do not have it", then fatally stabs Lucchesi through the throat with his own glasses. Calo is then himself gunned down by his target's team of bodyguards.
On the audio commentary for the DVD release of the film, director and co-screenwriter Francis Ford Coppola states that the Lucchesi character could be very recognizable for Italian citizens. The thick-rimmed glasses, the official police bodyguards, and the message that Calo whispers to him before he dies are all said to be clues to the actual person Lucchesi is at least partly based on. This has led many to conclude that the character is based on Giulio Andreotti, the seven-time Prime Minister of Italy who has often been accused of Mafia dealings, and who is the source of the saying "Power wears out those who do not have it."
It is also suspected that Lucchesi's first name, "Licio" (and, indeed, his whole character), may be a reference to Licio Gelli, the prominent Italian financier and leader of Propaganda Due, who played a leading role in both the collapse of Banco Ambrosiano and the various conspiracy theories related to the death of Pope John Paul I, both of which inspired the plot of the film.