At sometime in the mid 1870's (the exact date is never given) Lieutenant Colonel Owen Thursday (Henry Fonda) is en route to his new posting in Arizona at Fort Apache. Traveling with the widower Lieutenant Colonel is his daughter, Philadelphia (Shirley Temple). Colonel Thursday is clearly upset at having received this posting. We learn that during the Civil War, Thursday was a brevet General but has lost his promotion since the war and has been floating around the war department since with no one knowing what to do with him.
When Thursday and his daughter arrive at a store on the way to the fort the meet up with recent West Point graduate, Second Lieutenant Michael Shannon O'Rourke (John Agar). Philadelphia is smitten with the young lieutenant. At this point, Sergeants Beaufort, Mulcahy, Quincannon, and Schattuck (Pedro Armendariz, Victor McLaglen, Dick Foran, and Jack Pennick respectively) arrive with a wagon to escort O'Rourke to Fort Apache. O'Rourke offers Thursday a ride to the fort which the Colonel accepts, also starting a running gag where Thursday is unable to remember O'Rourke's name.
At Fort Apache we learn that Captain Kirby York (John Wayne), a popular and respected officer, was hoped to take over the regiment. Many are visibly upset at Colonel Thursday's appointment to command, especially Captain Sam Collingwood (George O'Brien) who along with York served under Thursday in the Civil War. Collingwood puts in for a transfer to West Point when Thursday arrives as due to an indecent during the war which is only ever alluded to Collingwood refuses to serve under Thursday again. We then meet Lt. O'Rourke's father, former brevet Major now Sergeant Major and Medal of Honor holder Michael O'Rourke (Ward Bond) and his mother Mary (Irene Rich).
Lt. O'Rourke attempts to take over the training of new recruits but proves unsuccessful as the lieutenant is described as "... an officer and a gentleman..." doing work not meant for a gentleman. The four sergeants immediately take over training leading to comedic outcomes. This frees Lt. O'Rourke to call on Philadelphia and spend time with her, much to Philadelphia's delight. Time is also given to show the soldier's wives (Anna Lee, Movita, and Mae Marsh) helping Philadelphia to settle into the Fort.
It is learned through exposition that Colonel Thursday would rather be on the northern plains fighting the Lakota or Cheyenne tribes rather than remain in Arizona to contain the Apaches on their reservation. He even dismisses the Apaches as "digger Indians" much to York's chagrin. Thursday clearly hungers for glory and will go to any lengths to achieve it. Thursday is also upset at what he sees as Fort Apache's lack of discipline and military protocol. He institutes reforms which, while unpopular, do contribute to better the regiment.
While on a pleasure ride with Philadelphia, Lt. O'Rourke sees smoke on the horizon and finds that a repair team sent out to fix Fort Apache's telegraph lines has been massacred by Apaches. They return to the fort to sound the alarm. Colonel Thursday, while grateful to O'Rourke for protecting his daughter, is angry at the lieutenant for taking his daughter off post without his permission. He later revels that he thinks O'Rourke, as the son of an Irish immigrant, is beneath Philadelphia's social class and thus an unsuitable match.
Thursday sends Lt. O'Rourke out with four men to bury the repair team and finish their job. When a small band of Apaches attack the repair crew, Thursday and York's company spring a trap and drive back the Apache.
They then travel to a store managed by Indian Agent Silas Meacham (Grant Withers), fearing for his life. They learn that Meacham, and the Bureau of Indian Affairs in general, are incredibly corrupt and spend money given to them to take care of the Apaches on cheap, shoddy goods. The Apaches, tired of getting poor grade food and cheap whiskey instead of proper meals and tools, have subsequently left the reservation under Cochise (Miguel Inclan). The soldiers also find a cache of Winchesters which Meacham has been illegally selling to the Apaches for even more personal profit. Though Thursday finds Meacham a despicable human being, he is a representative of the US government and entitled to army protection. Thus, Thursday has Meacham taken back to Fort Apache and destroys most of Meacham's supplies.
Captain York, who as dealt with Cochise in the past, volunteers to meet with the Apache leader and negotiate the latter's return to the reservation. Succeeding in his enterprise, York returns to the fort during the annual non-commissioned officer's dance to report to Colonel Thursday. Thursday then musters the regiment to intercept Cochise, disarm the Apaches, and escort them by force to the reservation. York argues against this as he promised Cochise fair and humane treatment. Thursday dismisses York's advise and departs to attack Cochise. Not a minute after the troops leave the fort, Captain Collingwood's transfer orders finally arrive but his wife doesn't sent a runner to fetch the Captain, knowing he would rather die than be seen a coward.
Thursday finds himself outsmarted by Cochise but the Apache chief doesn't initially attack. He tries to negotiate with Thursday but the Colonel, hungry for battle, insults Cochise and forces the Apache into battle. Not wanting to share glory with Lt. O'Rourke and York, Thursday orders them to remain behind and defend the wagon train while he leads the bulk of the regiment to attack Cochise.
Riding into what he believes is the Apache camp, Thursday is ambushed and most of his men killed. Thursday manages to escape to the supply wagons but takes a spare horse from York and returns to the survivors of his command. His return earns the respect of Lt. O'Rourke, his father, York, and Captain Collingwood. Thursday, Sergeant O'Rourke, Collingwood, and the dozen or so other survivors are subsequently massacred by Cochise and his men.
Seeing Cochise and his band approaching the last company protecting the wagon train, York send O'Rourke to nearby Fort Grant to get reinforcements and "... marry that girl!" But Cochise, knowing the York is an honorable man, gives the Captain Thursday's banner and rides away with his people.
A year or two later, York has been promoted to Lieutenant Colonel and given command of the Fort Apache regiment. Philidephia and Lt. O'Rourke have married and have a son. York interviews a group of reporters about Colonel Thursday. Though York knows Thursday's actions and character have been glorified to the extreme a la Colonel Custer, he goes along with what the reporters believe in order to support the regiment's image and support their actions against a new Apache uprising led by Geronimo.