Josey Wales, a Missouri farmer, is driven to revenge by the murder of his wife and young son by a band of pro-Union Jayhawker militants. The murderers were from Senator James H. Lane’s Kansas Brigade, led by Captain Terrill.
After grieving and burying his wife and son, Wales joins a group of pro-Confederate Missouri Bushwhackers led by William T. Anderson and fights in the Civil War. At the conclusion of the war, Captain Fletcher persuades the guerrillas to surrender, saying they have been granted amnesty. Wales refuses to surrender. As a result, he and one young man are the only survivors when Captain Terrill’s Redlegs massacre the surrendering men. Wales intervenes and wipes out most of the Redlegs with a Gatling gun.
Senator Lane forces Fletcher to work with Terrill in tracking Josey down and puts a $5,000 bounty on Wales, who is now on the run from Union militia and bounty hunters. Along the way, despite wishing to be left alone, he accumulates a diverse group of companions. They include an old Cherokee named Lone Watie; Little Moonlight, a young Navajo woman; Sarah Turner, an elderly woman from Kansas; and her granddaughter Laura Lee, whom Wales rescues from Comancheros. At Santo Rio two men, Travis and Chato, who had worked for Grandma Sarah’s son Tom, join the group.
Wales and his companions find the abandoned ranch owned by Tom Turner, Laura’s father, and settle in after Wales parleys and makes peace with the neighboring Comanche tribe leader, Ten Bears. Meanwhile, a bounty hunter whose partner was gunned down by Wales at Santo Rio guides Captain Terrill and his men to the town. The following morning, the ranch is attacked by the Redlegs. Wales’ companions take cover in the fortified ranch house and open fire, gunning down all of Terrill’s men. A wounded Wales, despite being out of ammunition, pursues the fleeing Terrill back to Santa Rio. When he corners him, Wales dry fires his four pistols through all the empty chambers. Terrill attempts to draw his cavalry sabre but Wales turns it against him and prevails.
In the bar in Santa Rio, Wales finds Fletcher with two Texas Rangers. The locals at the bar, who refer to Wales as “Mr. Wilson,” tell the Rangers that Wales was killed in a shoot-out in Monterrey, Mexico. The Rangers accept this story and move on. Fletcher does not believe the story, and pretends to not recognize Wales. He says that he will go to Mexico to look for Wales himself and try to tell him that the war is over. Wales says, “I reckon so. I guess we all died a little in that damned war,” before riding off.