The series is set in a run-down family-owned bar called Horace and Pete's in Brooklyn, New York. The bar has been owned by the family since 1916 and has been passed down through several generations, always with a Horace and a Pete in charge. The current owners are the 49-year-old Horace Wittel VIII, who inherited the bar when his father Horace Wittel VII died one year earlier, and his 52-year-old cousin Pete. The bar is old-fashioned and tradition-bound; for example no mixed drinks are served and the only beer they sell is Budweiser on tap. Pricing is variable, depending on whether the customer is a regular or a hipster who is drinking there "ironically." For many years, the management has been watering down the drinks, even justifying it to themselves by saying their alcoholic regular customers would be dead by now if they were drinking full strength liquor.
The regular bartender is Uncle Pete (the "previous Pete"), an acerbic foul-mouthed old bigot who insults everyone around him but is frequently entertaining. Regular customers include Marsha, an aging but still attractive alcoholic who was Horace senior's last sexual partner before his death; Kurt, an opinionated loudmouth; and Leon, a laconic barroom philosopher.
A feature of the series was the frequent references to highly topical current events during the bar-room discussions. This was made possible by the very short time frames between the production and release of the episodes (less than a week). Other story lines appeared to take place over longer periods.