An American, Sean Thornton (John Wayne), arrives in Ireland and plans to settle in Innisfree, where he was born. On the way to Innisfree with Michaeleen Oge Flynn (Barry Fitzerald), Sean spots a redheaded woman moving a flock through the fields. He becomes interested in this unknown woman, and greets her at the church entrance the next day, where he learns her name - Mary Kate Danaher (Maureen O'Hara), a redhead with a temper to match.
Sean wants to buy the ancestral Thornton cottage from well-to-do widow, Sarah Tillane (Mildred Natwick), and finds himself in a squabble with "Red" Will Danaher (Victor McLaglen), a neighbor and would-be suitor of the Widow Tillane. Mrs. Tillane, angered by Danaher's presumptuous attitude and bragging at the local pub, sells the land to Thornton. When Sean goes to claim the cottage, he finds Mary Kate there, cleaning it as a good Christian act. Thornton easily fits into Innisfree, earning a reputation as a quiet, peace-loving man. Danaher, however, holds a grudge. When Thornton arranges to court Danaher's sister, Mary Kate, the real fun begins. Thornton learns that Ireland's quaint charm includes some old-fashioned rules of courtship. He needs Squire Danaher's consent to marry Mary Kate, since their father is deceased. He and the local shaughraun (matchmaker), Michaleen Flynn, pay a formal visit to Danaher to ask for Mary Kate's hand. Danaher refuses and orders the two men out of his house. Sean and Mary Kate are devastated. Sean is puzzled by social rules that seem archaic to him, and takes out his frustrations by seemingly reckless cross country rides. Concerned, Thornton's newfound friends - Flynn, Reverend Playfair (Arthur Shields), and Father Lonergan (Ward Bond) - concoct a plot to trick Danaher into consenting to the marriage. They lead Danaher to believe Sean is courting the widow Tillane, who will have nothing to do with Danaher until Mary Kate is married off and out of the house. Danaher agrees to the courtship when Thornton wins the local cross country race, claiming the Widow's bonnet as his trophy.
The Thornton/Danaher courtship quickly skips a few months of steps and soon turns into a wedding, but Squire Danaher, furious upon learning (at the reception) that he has been duped, reneges on Mary Kate's promised dowry of 350 pounds (Irish Currency). The money is a trifle to Sean Thornton, who has learned for himself that money isn't worth fighting for, and refuses to "shame" himself by begging for it. Mary Kate perceives Sean's lack of action as cowardice, and refuses her new groom his marital privileges. Tension builds in Innisfree, a highly sporting community, as the townspeople hope for a fight between Thornton and Danaher. However, Thornton refuses to fight. He suffers the guilt of a terrible secret concerning his last prize fight, which only the Reverend Playfair knows.
As tensions grow, Father Lonergan counsels Mary Kate about her duties as a married woman, as Reverend Playfair councils Sean about what the dowry means to his wife. Although Mary Kate acquiesces, she feels that the dowerless marriage is improper and leaves Sean. To Sean, this is the last straw. He goes to the train station, literally drags his wife back to Squire Danaher's farm, collecting a very large crowd along the way, as the neighboring towns realize that Sean is about to confront Will Danaher and demands Mary Kate's dowry. Danaher refuses to pay the dowry, so Sean calls off the marriage - claiming that the dowry is their custom, not his. Shamed in front of the whole county, Danaher gives up the dowry (350 pounds cash). To further prove a point Sean stalks over to the nearby threshing furnace, where Mary Kate open the door for Sean to throw the money into the fire. This infuriates Danaher and he takes a swing at Sean, who defends himself. Mary Kate sees that her husband is willing to fight and heads home to cook dinner.
For the rest of nearby residents of Innesfree, farmhands, the train engineers and passengers who've stayed for the event, the long awaited fight breaks out - starting at Danaher's farm and heading into Innesfree. During this Sean learns Danaher is, indeed, a worthy opponent. Many a side bets are laid - including Reverend Playfair, the visiting Bishop, and the local constabulary. By the end, the two men respect each other and have become fast (if drunken) friends. After the fight, the town gathers together to also help save Reverend Playfair's job and Will Danaher starts formally courting the Widow Tellane.