The film is narrated by the adult Mattie Ross (Elizabeth Marvel), who recounts that in the late fall of 1877, when she was 14, her father was murdered in Fort Smith, Arkansas by one of his hired hands, Tom Chaney (Josh Brolin). Chaney made off with her father's horses and two of his California gold pieces. While collecting her father's body, young Mattie (Hailee Steinfeld) inquires about a Deputy U.S. Marshal to hire to track down Chaney. She is given three recommendations, but chooses to hire Rooster Cogburn (Jeff Bridges), because he is described as the most merciless. He repeatedly rebuffs her attempts to hire him, believing that she doesn't have the $50 with which to pay him.



Meanwhile, at the boarding house where she is staying, Texas Ranger LaBoeuf (Matt Damon) arrives on the trail of Chaney. LaBoeuf has been pursuing him for several months over a murder in Texas. He proposes to Mattie that they should team up with Cogburn, since the Marshal knows the Choctaw terrain where Chaney is hiding, while LaBoeuf knows how the man is most likely to behave. Mattie rejects LaBoeuf's offer, because he would take Chaney back to Texas to be hanged for the prior murder (in exchange for a large cash reward), instead of her father's. After finally securing Cogburn's services for $100, Mattie is instructed to meet him the following morning to begin the search for Chaney. Instead of meeting her, though, Cogburn leaves her train ticket and a note telling her to go home, while he goes to apprehend Chaney.



Mattie catches up with Cogburn after fording a river on her horse. He has teamed up with LaBoeuf and agreed to split the Texas reward for Chaney. Accusing him of fraud, Mattie threatens to have Cogburn arrested for breaking their agreement, which specified that she must accompany him on the manhunt. Reluctantly, he allows Mattie to come along. After a disagreement, LaBoeuf sets off on his own in search of Chaney. Eventually, Mattie and Cogburn come across an isolated shack, where two outlaws are staying. After they turn on each other, Cogburn kills the older outlaw, and as the younger one is dying (from a stab wound inflicted by the older outlaw, coupled with a gunshot wound inflicted by Cogburn), he explains that "Lucky" Ned Pepper (Barry Pepper) and his gang were planning on returning to the shack later that night. Believing Chaney to be riding with Pepper's gang, Cogburn and Mattie lie in wait for the gang from the safety of higher ground.



However, LaBoeuf arrives at the shack ahead of the gang. When they arrive, they lasso LaBoeuf and drag him behind a horse. Cogburn opens fire from his hiding spot, kills two members of the gang, and accidentally wounds LaBoeuf. During the night, Cogburn drinks a great deal of whiskey and is severely drunk the next morning. The following night, he and LaBoeuf argue again, and LaBoeuf departs for Texas. The next morning, as Mattie draws water at the river, she encounters Chaney, who is watering the gang's horses. She draws her father's pistol and shoots him. The pistol misfires as she tries to finish him off, and he drags her back to the gang. Ned uses Mattie as a hostage, to get Cogburn to ride off. Ned leaves Mattie with Chaney, ordering him not to kill her. He plans to send a horse back for Chaney later in the day, once the gang have reached a new hideout.



Once alone, Chaney rejects Mattie's offer to attempt to reduce his sentence of her father's murder if he lets her go, and attacks her to silence her; LaBoeuf arrives and saves Mattie by knocking Chaney out with the butt of his rifle. LaBoeuf explains that when he heard the shots he doubled back and met up with Cogburn, who hatched a plan. The two watch from the hill above to the valley below, where Cogburn faces off against Pepper and his gang: the Parmalee brothers and Doc. After a brief argument, Cogburn charges wielding a Colt revolver in each hand. A tense shootout ensues, during which one of the Parmalee's shoots Rooster, but Rooster in rapid succession shoots and kills all of the gang and shoots and wounds Pepper. Pepper shoots Cogburn's horse and Cogburn becomes trapped under the corpse. The wounded Pepper prepares to finish off Cogburn, but LaBoeuf is able to kill Lucky Ned with his Sharps rifle from over 400 yards away. Chaney regains consciousness soon after, knocks out LaBoeuf, and wrestles with Mattie for his rifle. Mattie is able to overpower Chaney and shoots him in the chest, knocking him off the mountain campsite, killing him. The recoil from the rifle knocks her down into a snakepit, where she is bitten on the hand by a rattlesnake. Cogburn climbs down the pit and shoots the snakes, while LaBoeuf regains consciousness and pulls them up. Cogburn tells LaBoeuf to stay put on the hill, and says he will send a horse for him in the morning. Cogburn takes Mattie and rides all night to get her to a doctor. When they are only a few miles from the nearest town, Mattie's horse collapses of exhaustion and Cogburn puts it out of its misery. Cogburn picks up Mattie and continues on foot, arriving in time to save Mattie's life.



Twenty-five years later, in the summer of 1903, Mattie – now 40 and with only one arm, due to amputation necessitated by the snakebite – receives an invitation from Cogburn to meet him at a traveling Wild West show with which he is performing. When she arrives at the site, she learns that Cogburn had died three days earlier (July 15, 1903). She has his body moved into her family plot in Yell County, Arkansas, and the film ends with her standing over his grave. LaBeouf's fate is unknown, as Mattie remarks that she never saw him again.