Set in a dystopian April 1984, nearly 40 years after the end of the second world war, and a few years after the so-called Atomic Wars, Winston Smith (John Hurt) is a middle-aged man who endures a squalid existence in the totalitarian superstate of Oceania under the constant surveillance of the Thought Police. The story takes place in the decaying city of London, the capital of the territory of Airstrip One (formerly Great Britain). Winston is just another lowly Politcal Party official in the Ministry of Propaganda. He lives in a small, dirty flat, and works in a small office cubicle alongside dozens of other men and women at the Ministry of Truth, rewriting history in accordance with the dictates of the Party and its (probably mythical) supreme figurehead, Big Brother (Bob Flag), a Joseph Stalin--esq leader who is never seen in public and whom appears only on propaganda posters, advertising billboards, and television monitors. Winson's task, like many in his office, is to "erase" anyone who has fallen afoul of the government from the official histories whom becomes "unpersons". Automaton-like, he goes through his daily routine, under constant surveillance from the "telescreens" (two-way TV monitors) and his fellow citizens. Winston occasionally attends public rallys at Victory Square where the citizens are shown propoganda films of the current war situation as well as contraditing and false news stories about Oceana's war effort to unite the civilized world under the rule of Big Brother.
While his co-worker and neighbor, Parsons (Gregor Fisher), seems content to follow the state's laws, Winston, haunted by painful childhood memories and restless carnal desires, keeps a secret diary of his private thoughts, thus committing thoughtcrime: the crime of independent thought either contrary or superfluous to the aims of the Party. The so-called 'Party' is the former English parlament which follows Ingsoc (Newspeak term for "English Socialism"); the political ideology of the government of Oceania.
His life takes a fatal turn when he is accosted by a fellow Outer Party worker; a mysterious, bold-looking young woman named Julia (Suzanna Hamilton) a print machine mechanic who works in the Ministery of Truth, and they begin an illicit affair. Their first meeting takes place in the remote countryside where they exchange subversive ideas and have a sexual encounter in the woods out of view and earshot of the nearest telescreen. Shortly after, Winston rents a room above a pawn shop (in the supposedly safe proletarian neighborhood) where they continue their liaison. Julia, a sensual, free-spirited young woman, procures contraband food and clothing on the black market, and for a brief few months they secretly meet and enjoy an idyllic life of relative freedom and contentment together.
It comes to an end one evening in June 1984 when the Thought Police suddenly raid the flat and arrest the two of them. It is revealed that there is a small telescreen hidden behind a picture on the wall in their room, and that the elderly proprietor of the pawn shop, Charrington (Cyril Cusack), is in fact a covert agent of the Thought Police. Winston and Julia are then separated and taken away to be detained, questioned and brutally rehabilitated.
Winston is brought to a fortress-like building which is called the Ministry of Love, where he is systematically tortured and brainwashed by O'Brien (Richard Burton), a high-ranking member of the Inner Party whom Winston had previously believed to be a fellow thoughtcriminal and agent of the resistance movement led by the archenemy of the Party, Emmanuel Goldstein (who, like Big Brother, perhaps does not exist).
O'Brien instructs Winston about the state's true purpose and schools him in a kind of catechism on the principles of "doublethink" the practice of holding two contradictory thoughts in the mind simultaneously. Doublethink entails the willful denial and destruction of all self-evident truths, memories, and/or physical proofs which run contrary to the supreme "reality" that is invented by the Party at any given time.
For his final rehabilitation, Winston is brought to Room 101, where O'Brien tells him he will be subjected to the "worst thing in the world," designed specifically around Smith's personal phobias and traumas. When confronted with this unbearable horror which turns out to be a cage filled with vicious, carnivorous rodents, Winston's psychological resistance finally and irretrievably breaks down, and he hysterically repudiates his allegiance to Julia. Now completely subjugated and purged of any rebellious thoughts, impulses, or personal attachments, Winston is restored to physical health and released.
Winston returns to the Chestnut Tree Café, where he had previously seen the rehabilitated thought criminals Jones, Aaronson, and Rutherford (themselves once prominent but later disgraced members of the Inner Party) who have since been "vaporized" and rendered unpersons. While sitting at the chess table, Winston is approached by Julia, who has also been brainwashed and rehabilitated. They share a bottle of Victory Gin and unemotionally exchange a few words about how they have betrayed each other. After Julia leaves, Winston watches a TV news broadcast of himself on the large telescreen confessing his "crimes" against the state and imploring forgiveness of the populace in the humbled and remorseful manner of a prodigal son come back to the fold.
Upon hearing a news report declaring the Oceanian army's utter rout of the enemy Eurasian forces in North Africa, Winston silently and tearfully professes his gratitude and love for Big Brother as he anticipates the date of his execution. Having been deprived of his freedom to think and feel for himself, and reduced to a mere shell of a man, Winston is soon to be deprived of his very physical existence as well. He now welcomes his final subjugation to the absolute power and supremacy of the state as he says "I love you" to the glowering, ever-watchful visage of Big Brother on the telescreen.