Josey Wales, a Missouri farmer, is driven to revenge by the murder of his wife and son by a band of pro-Union Jayhawkers - Senator James H. Lane's Redlegs from Kansas.
Wales joins a group of pro-Confederate Missouri Bushwhackers led by William T. Anderson. At the conclusion of the war, Captain Fletcher persuades the guerrillas to surrender, saying they have been granted amnesty. Wales refuses to surrender. As a result, he and one young man are the only survivors when Captain Terrill's Redlegs massacre the surrendering men. Wales intervenes and guns down several Redlegs with a Gatling gun.
Senator Lane puts a $5,000 bounty on Wales, who is now on the run from Union militia and bounty hunters. Along the way, despite wishing to be left alone, he accumulates a diverse group of companions. They include an old Cherokee named Lone Watie, a young Navajo woman, and an elderly woman from Kansas and her granddaughter whom Wales rescued from Comancheros.
In Texas, Wales and his companions are cornered in a ranch house which is fortified to withstand Indian raids. The Redlegs attack but are gunned down by the defenders. Wales, despite being out of ammunition, pursues the fleeing Captain Terrill on horseback. When he catches him, Wales dry fires his pistols through all twenty-four empty chambers before stabbing Terrill with his own cavalry sword.
At the bar in Santa Rio, a wounded Wales finds Fletcher with two Texas Rangers. The locals at the bar, who refer to Wales as "Mr. Wilson," tell the Rangers that Wales was killed in a shoot-out in Monterrey, Mexico. The Rangers accept this story and move on. Fletcher pretends he does not recognize Wales, and says that he will go to Mexico and look for Wales himself. Seeing the blood dripping on Wales's boot, Fletcher says that he will give Wales the first move, because he "owes him that." Wales rides off.