Joey's earliest memory is of being taken to the town marketplace with his mother while an auction that he did not fully understand took place around him. Two men bid feverishly against each other until the auctioneer brings down his hammer and Joey is led away. He has never been apart from his mother before, and he starts crying for her, hearing her cries for him becoming fainter as he is taken farther away.
Joey's new home is a farm, with plenty of land and a comfortable stable where he is given a stall next to a placid, motherly horse called Zoey. He likes her very much but dislikes the farmer who has purchased him. However, Joey forms a deep bond with the farmer's son, Albert: the two become soul mates as Albert works hard to transform Joey into a farm horse (his father threatened to get rid of Joey unless he could work with Zoey in the fields).
It is the onset of the First World War, and the British army is buying horses for the front; Albert's father takes Joey to market and sells him to an honorable soldier called Captain Nicholls. Too late, Albert rushes to market and is unable to reverse the sale. He tries to join the army with Joey but is too young, so he promises Joey that, as soon as he is of age to enlist, he will go and find the beloved animal. Captain Nicholls promises to take great care of Joey and also to keep in touch with Albert.
Joey misses Albert and his old life. He makes friends with Topthorn, a beautiful black thoroughbred, and the two are inseparable from that moment on. Joey does not like the man training him; that man, Corporal Samuel Perkins, is a former jockey. Although he is an excellent rider, he makes up for his short stature by bullying the horses in his care. Captain Nicholls comes to Joey's defense and instructs that he be given more food: he is to be the Captain's horse and therefore should not lose conditioning.
The cavalry regiment is eventually sent by boat to France, where the troops will join the front lines. The voyage is rough; the horses and their soldiers are seasick. The mood is one of fevered excitement; however, once the men and horses reach their encampment and the reality of the situation sets in, their high spirits dissipate. Topthorn, ridden by Captain Stewart, and Joey, ridden by Captain Nicholls, are at the front of the cavalry. The fighting is terrifying and confusing; Joey describes how he can feel Captain Nicholls riding him at one moment, while the next moment he cannot. Captain Nicholls ends up being killed in an early battle.
Joey remains at the head of the cavalry and is ridden now by Trooper Warren: a kind, gentle lad who is not a particularly good horseman but whose conscientious treatment keeps Joey going throughout the harshness of the winter. (Trooper Warren also has a tendency to pray aloud while riding into battle.) In one part of the campaign, Topthorn and Joey lead the regiment over the barbed wire defenses on the battlefield only to find themselves in enemy territory, as German soldiers appear from the trenches all around them. In an effort to save the remainder of his men from death in battle, Captain Stewart orders them to surrender. As he and Trooper Warren are led away in one direction, Joey and Topthorn are led the opposite way. Their German captors respect the bravery of the horses, and the captain orders his troops to treat them like the heroes they are. They are put to work as stretcher bearers, pulling the ambulance carts.
The two horses are stabled together. One evening, they are startled by the stable door opening. A man comes inside with a small girl. Emilie is a sickly child who lives with her grandfather on his farm, which has been taken over by the Germans for use as their base camp. Emilie, who has a strong and spirited personality, comes to consider the horses her own. The Germans also take a liking to these animals, and Joey is awarded a bloodied Iron Cross medal for bravery by a German soldier whom they rescue from the battlefield.
After a summer working on the farm for Emilie's grandfather, the horses have to leave to follow the German army and pull artillery guns. Emilie is distraught at the loss of her horses. Topthorn is now ridden by Crazy Friedrich, a thoughtful man who has become very attached to him. As the horses are drinking from a stream, Topthorn stumbles and collapses. Joey realizes that he has lost his best friend. As Joey and Friedrich mourn Topthorn, the sound of shells exploding begins around them. Friedrich does not manage to get away and is killed a few paces from Topthorn. Joey stays with them for as long as possible, not wanting to be alone in the world, but the gunfire and shelling terrify him; he begins to run with no particular direction in mind. He runs all night, stumbling over craters and ditches until he feels barbed wire snag his leg. He rips himself free, but his leg begins to stiffen; as the sun rises, he hears excited voices on both sides of him. Joey has found himself trapped in No Man's Land between the British and German trenches. A man in a German uniform waves a white handkerchief and comes out off the trench on one side, and a British soldier follows suit. They agree to work together to free Joey; once they have done so, they flip a coin to decide who will take ownership of Joey. The British soldier wins, and Joey rejoins the British army. The two soldiers observe that if the war were left to them, they would be able to solve everything by communicating and trusting each other.
Joey's leg is extremely painful; he has blood poisoning, which leads to lockjaw. The huge man in charge of the camp orders that he be washed and tended to. The voice of the soldier who answers this man sends chills down Joey's spine: Joey realizes that his Albert is the soldier who was ordered to take care of him. As Albert and Albert's friend, David, clean the mud from Joey's legs, David tells Albert that this horse has the same perfectly equal white sock markings that Albert's farm horse had. Then he washes Joey's forehead and finds the white star marking that Joey had. To confirm that it really is Joey, Albert gives the owl-like whistle with which he always called Joey; Joey responds by going straight to him. Joey and his commanding officer, Major Martin, nurse Joey back from near-death to health.
The end of the war arrives suddenly; when the men are about to leave for home, Albert asks Major Martin about the fate of the horses. He learns that they will be auctioned off, likely to local butchers who will slaughter them for meat. Major Martin gives the men every penny of his salary to try to win Joey at auction. They are outbid by the butcher, but at the last minute another bid is received and Joey is sold to Emilie's grandfather. Emilie died after the horses left the farm, and the old man wants to keep Joey in her memory. When he hears Albert's story, the grandfather sells Joey to Albert for one penny, as long as Albert promises to keep Emilie's memory alive. Albert does so.
When Albert and Joey arrive home, Albert rides Joey into the village and they are welcomed as heroes. Albert subsequently marries his sweetheart, Maisie, but she and Joey never take to each other. Albert's father now dotes on Joey like a grandchild, and Joey resumes his life as a farm horse alongside his beloved old Zoey.
