In the town of Big Whiskey located somewhere in the state of Wyoming, the sheriff, “Little Bill” Daggett, runs the town with an iron fist. He does not tolerate the presence of firearms or criminals in his town so it comes as a great surprise---or disappointment---to the residents of the local brothel when he grants some uncharacteristic clemency for two cowboys who mutilate a prostitute named Delilah Fitzgerald. The prostitute’s offense? Laughing at her client’s penis size.
The two cowboys in question are “Davey-Boy” Bunting and “Quick” Mike and for their crime they are ordered by Little Bill to pay reparation to the brothel owner, “Skinny” Dubois, a pithy amount considering the mauling. Mr. Dubois prostitutes do not take kindly to the indulgence grated to the pair. Led by an indignant Strawberry Alice they pitch a reward of $1,000 to whoever kills the cowboys for them.
It doesn’t take very long for this offer to attract the attention of bounty hunters and soon a young, brash gunfighter going by the name “The Schofield Kid” begins recruiting men to form a posse to bring the offenders to “justice.” He seeks out William Munny, who was once a outlaw, infamous for being a hard-hearted killer. Munny, however, now lives out his life as a penitent, peaceful farmer who tries his best to raise pigs as well as his two kids on his own, as he is a widower. The Kid makes Munny the offer which he initially refuses as he has sworn off killing and strong drink, having lost a taste for both these over the years of living quietly. He reevaluates the matter however, seeing the sorry state of his farm and realizing that the cash would help him secure his children’s welfare. He catches up with the Kid and recruits another retired gunslinger, Ned Logan, on route.
Word of the bounty also reaches the ears of an old rival of Little Bill, the British gunslinger, English Bob, and he rides out to Wyoming for a bit of adventure. The biographer W.W. Beauchamp rides along with Bob on their way to Big Whiskey. Upon their arrival English Bob is promptly disarmed and to deter other would-be vigilantes Little Bill gives Bob a vicious beating and he is expelled from town the very next morning. The historian Beauchamp however resolves to stay behind to write about the life of Little Bill Daggett, being enamored by his old exploits as a gunfighter and by the mindset and myth of the gunfighter in general.
Later on, The Kid, Ned Logan, and William Munny arrive in Big Whiskey during a squall and they head straight for the brothel/tavern to ask about the felon’s whereabouts. Munny sits alone in the saloon, content to let the rest do the talking. He decides to rest from the long, grueling ride to Wyoming as he has caught a fever from riding through the rain; as such, he is in no condition for roughhousing. Little Bill and his enforcers arrive not too long afterwards and they are indiscriminate with who they implement their “no firearms and/or vigilantes” rule in their town. They kick him out of the saloon after giving him an enthusiastic pounding for carrying a pistol. The Kid and Logan evade Little Bill and the beating that would come with a meeting with him by slipping through a back window. They recover Munny and tend to his injuries in a barn located on the outskirts of Big Whiskey.
After some reconnaissance the three manage to locate the cowboy-felons and kill Davey-Boy Bunting. Logan and Munny note however that they have utterly lost their tolerance for murder. The two former gunfighters have a difference in opinions after seeing that they haven’t got the stomach for violence anymore. Munny feels honor-bound to complete the job; Logan on the other hand elects that going home is a perfectly acceptable course of action and he does just that leaving Munny and The Kid to head off to the cowboy’s ranch where the rest of their quarry is. The Kid manages to catch Quick Mike by surprise in an outhouse and kill him. Visibly shaken by the ordeal, he then confesses to Munny that he’s never killed anyone before and he promptly gives up on life as a gunfighter.
Before the pair receive their reward money from the grateful brothel women, the learn that Logan was caught by Little Bill’s men and brutalized, dying in the process. Before expiring however, Logan divulges Munny’s violent past. A resentful Munny swears revenge on Little Bill and he returns to Big Whiskey to finish him off while The Kid heads back to Kansas to give part of the bounty to Munny’s kids and Logan’s widow. Munny arrives at night and finds Logan’s mutilated corpse in a coffin outside the saloon, displayed for all to see with a warning sign saying: “THIS IS WHAT HAPPENS TO ASSASSINS AROUND HERE. “
Little Bill is aware that Logan had associates and that there would likely be retribution for what he had done. In response to this he gathers a posse to help hunt down The Kid and Munny. Unafraid of the danger to himself, Munny calmly steps in and shoots Dubois. Finally, Little Bill faces Munny and they have a taut exchange of words that culminates into a full-blown gunfight. Little Bill seriously injured in the process and Munny manages to kill several of his deputies, seemingly having regained his former ferocity. Right before Munny finally shoots Bill, he swears an oath to "see you in hell." Before leaving the town of Big Whiskey Munny warns the residents, threatening them that he will return to kill some more if Logan’s body is not laid to rest properly or if any of the prostitutes who hired his “services” are maltreated in any way. The film ends shortly after that with a text flashed on the screen of Munny’s next steps after the Big Whiskey fiasco. It reads that he had moved to San Francisco with his children in tow and he set up a dry goods business that did very well. It is presumed that he has left the world of violent gunfights and bloody vendettas permanently.
