Set in Highland Park in metro Detroit, Michigan, Gran Torino begins with the funeral of Dorothy Kowalski, wife of retired Ford car factory worker and Korean War veteran Walt Kowalski. Walt scowls at and is gruff with his surviving family members during the service and wake.
A Catholic priest, Father Janovich, tells Walt he promised Dorothy he would get Walt to come to confession. Walt refuses and insults the priest for being young and knowing nothing about life or death. Next door, a Hmong family moves in. Walt scowls at another low-income Hmong family moving into what was once a white working-class area.
Thao, the young man living next door to Walt, is harassed by his cousin "Spider" until Thao agrees to join his gang. As initiation, the gang tells Thao to steal Walt's 1972 Gran Torino muscle car. That night Walt hears Thao in the garage and goes out with a shotgun pointed at him. Thao escapes when Walt trips and falls.
The following day, Walt intervenes by pointing his shotgun when the gangsters get into a shoving match with Thao and his sister Sue on Walt's lawn. Members of the Hmong community drop off gifts and food on Walt's porch in the following days. Sue tells him he is a hero to the community for having protected Thao. Walt is uncomfortable to be in this position and asks to be left alone.
One day Walt is driving home when he sees three Black men sexually harassing Sue on a street corner. Walt gets out and draws a pistol on the men, taking Sue with him. Sue informs Walt about the Hmong people, explaining that many of them immigrated to the US because they had sided with the US during the Vietnam War and had to flee when the communists started killing the Hmong. Walt admits he likes Sue but he thinks Thao is a dimwit. Sue says young Hmong men, many of them fatherless, are at risk of falling in with gangs.
On Walt's birthday, his son and son's wife visit to try to convince Walt to move to a retirement home. Walt kicks them out. Sue invites Walt to a barbecue next door; Walt joins because he is out of beer. In the house, Walt learns that Hmong people don't make eye contact or touch others on the head. He begins coughing blood, a symptom of his lungs having been damaged by smoking. In the bathroom, he realizes he has more in common with the Hmong than his own family. He then happily eats food. He also speaks with Thao in the basement, trying to convince Thao to be less shy and to ask out a woman Thao is interested in.
To make amends for trying to steal the Torino, Thao begins doing odd jobs for Walt. Walt is reluctant, but then realizes he can make Thao fix up other houses in the neighborhood that have fallen into disrepair. One night, Spider and his gang drive by. Walt mutters that Thao doesn't have a chance.
Thao and Walt's relationship deepens as Walt tries to teach Thao how to be more confident and manly. They go to Walt's barber, with whom Walt casually exchanges insults. Thao tries but fails to emulate their behavior. Walt then gets Thao a construction job and lends him tools.
On Thao's way home from work, Spider and his gang confront him in an alley and put out a cigarette on Thao's cheek while breaking his tools. Walt retaliates by assaulting one of the gangsters and warning him to stay away from Thao and his family. The gangsters hit back that night by firing guns through the window of Thao's house, wounding Thao's neck. At the same time, they abduct and rape Sue.
That night the priest visits Walt after bringing Thao and Sue to the hospital. Walt says Thao and Sue will never find peace until the gang is gone. The priest asks Walt what he is going to do. Walt says he isn't sure yet and is biding his time. Thao comes over the next morning and insists they hit back at the gang by murdering them. Walt tells him to calm down and wait; the gang is expecting them to strike back in that way.
Walt spends the day calmly going about errands, getting a haircut and a shave, and getting measured for a suit. Walt goes to confession finally, and tells the priest he is ashamed that he doesn't have a better relationship with his sons. He refuses to tell the worried priest what he is going to do.
At his house that afternoon, Walt brings Thao to the basement and gives him a medal he received as a soldier. He then locks Thao in the basement, refusing to let Thao take part in the retaliation as Thao thought he would. Walt then brings his dog to Thao's grandmother. He later calls Sue and tells her where the keys to his house are and that Thao is in the basement.
Walt stands on the lawn of the Hmong gangsters. He points his finger at them, making them nervous he is going to shoot. They all draw their guns on him from the porch and balcony. Walt pulls out a cigarette and asks if they have a light. He then crosses himself and reaches into his inner pocket. The gangsters all fire, filling his torso with bullets. Walt falls back with his arms outstretched, as though crucified. In his hand is his lighter but not a weapon.
Sue and Thao arrive at the police scene in the Gran Torino. Walt's dead body is loaded into an ambulance while the gangsters are handcuffed and taken away in cop cars. The film ends with Sue and Thao attending Walt's open-casket funeral. Walt wears the suit he was seen getting a fitting for. Father Janovich reads the funeral rites.
At the reading of Walt's will, it is revealed that Walt has left his house to the church and his Gran Torino to Thao on the condition Thao does nothing to modify it. Before the credits roll, Thao drives the car down a lakeside road with Daisy the dog in the passenger seat.
