The story opens in the drunk tank of a small town jail. Marine Gunnery Sergeant Tom Highway is sharing stories about his combat service with the other prisoners. At one point, he's interrupted by another prisoner who mocks Highway's military rank. Highway immediately beats the man, easily disarming him after he pulls a knife on the sergeant. The next day in court, Highway is given one last chance by the judge after being charged with public drunkenness and disorderly conduct. That doesn't sit well with the cop whose squad car Highway urinated on. He insults Highway, telling him his heroics are old news and that he doesn't give any serviceman discounts.
HIGHWAY: That's too bad; your old lady does.
Highway returns to his base where he works in supply. He roughly turns down a bribe from another officer who offers him a supply of Cuban cigars. Highway reports to his commanding officer, who tells him he's being transferred to Camp Lejeune in North Carolina where he'll be training unmotivated marines. Highway takes the bus to Camp Lejeune, meeting a young man, Stitch Jones, a budding rock guitarist who had just been kicked out of the club he was performing in for starting a fight with a group of locals. Jones is an instant irritation to Highway with constant chatter while Highway tries to get some sleep. When the bus stops at a roadside diner, Jones waits until Highway goes into the men's room and steals his bus ticket. The bus leaves before Highway can catch up with it and Jones.
Highway arrives at Camp Lejeune and reports to his commanding officer. Before meeting with the man, Highway catches up with and old friend, Sgt Major Choozoo. Highway's & Choozoo's CO, Major Malcolm Powers, was a new CO who used to work in Supply and was a big football hero at Annapolis. He is even stricter than Highway and immediately assumes that Highway, who has a history of conflict with superiors, will be trouble. Highway's past also includes an incident where he struck an officer who was classmate of Powers at Annapolis Academy. Powers assigns Highway to the battalion's "recon" (reconnaissance) platoon, one where the men are unmotivated, slightly out of physical shape, and have already gone through several sergeants who failed to get them up to the battalion's expectations. Making matters worse, Highway is saddled with Lieutenant Ring, who looked to be about three days out of college. (HIGHWAY: Does his mother know he's playing Marine?)
Highway leaves the meeting and meets the recon platoon, finding them just as lazy as Powers said they would be. At first, the men are scornful of Highway and pay him little attention. Highway destroys their boom box and suggests they have one last night of freedom before he begins his regimen of training the next day. Just then, Stitch Jones walks into the rec room and is instantly recognized by Highway. Highway drags Jones by the ear to his bunk to pay him for the bus ticket he stole and rips out Jones' earring, telling the men to be ready by six AM for training. After Highway leaves, the men conspire to have their biggest unit member, Swede Johanson, currently serving time in the brig, to take care of Highway when he's released.
Highway goes to the local bar and apartment house, meeting Little Mary Jackson, the wife of one of Highway's old combat buddies who was killed in Vietnam. She rents him a room and tells him that his former wife, Aggie, is working at a local bar popular with younger Marines. Highway goes there and finds Aggie, who is also seeing the bar's owner, Roy Jennings, a hulking man who hates Marines. While Highway tries to patch things up with Aggie, Stitch Jones performs live. He's heckled by a small group of Marines at one of the tables. Jones fires back easily at his hecklers. Jennings moves in, shoving the Marines around even after they've calmed down. Highway steps in threateningly, but Jones and Aggie talk the two men out of fighting each other. Jennings throws Highway and Jones out of the bar.
The next morning, Highway wakes the recon platoon at five AM instead of six. When they complain, he tells them they need to adapt to any situation. He lines them up for physical training (PT) and orders them to take off their mismatched t-shirts, saying they'll all wear the same or none at all. The platoon begrudgingly complies and Highway orders them to run for the day.
The next day, he orders the t-shirts off again, even though they were wearing the same ones. (HIGHWAY: Same as me?) While doing PT, Highway surprises them by shooting at them with an assault rifle.
HIGHWAY: This is the AK-47 assault rifle, the preferred weapon of your enemy. And it makes a distinctive sound when fired at you. So remember it.
When not staying after his Marines, Highway studies up on women's magazines, trying to understand how they think. He also keeps an eye on Aggie, who gets escorted home every night from the bar by Roy. Finally, Recon Platoon has had enough. They refuse to fall out for PT one morning and bring in Swede, who has an entire foot and at least one hundred pounds on Highway.
JONES: (grinning) Swede, say something charming to the man.
SWEDE: I'm going to rip your head off and s*** down your neck.
Or so he thinks. Highway gets Swede in an arm bar and knocks him out to the platoon's shock. But rather than send Swede to the MPs, he sends him out with rest of the platoon.
Other little hints begin to form about Highway caring for his men. When Profile accidentally shoots his rifle and almost hits Major Powers, Highway stays with him while Powers makes him run circles around his marching platoon back to the barracks.
HIGHWAY: (pulling up the exhausted Profile) Come on, Profile. Don't give the prick the satisfaction.
POWERS: What did you say?
HIGHWAY: I said 'don't give the prick the satisfaction', sir.
When Aponte goes AWOL, Highway looks for him, only to find Aponte took a second job to support his wife and two kids. Instead of turning him in, Highway gives him some cash out of his own pocket to help. When Major Powers wants Recon to act as a target to sharpen 1st Platoon's skills, Highway goes off book to execute a mock ambush. Powers is ready to arrest him for insubordination, but Lt. Ring, feeling guilty about putting Highway in that position in the first place, took responsibility for it.
After a Platoon Readiness Drill, Highway goes to visit Aggie and tries to talk to her, asking her what he could have done to fix their marriage. She said he was Marine through and through and had a hard time changing. She even accused him of trying to get back in with her by changing up his tactics, throwing him out of her house. A pissed-off Highway gets drunk and ends up in jail, joined by Jones, who got arrested when he protested a fixed band contest at a local bar. (HIGHWAY: You can run me, you can starve me and you can beat me and you can kill me. Just don't bore me.) Aggie and Choozoo come to bail Highway out, and Aggie reads him the riot act about how hard it was for her to be married to him while he was fighting in Vietnam and not knowing if he would come home alive when so many others didn't. All of her anger came out, and she hits Highway, but she apologizes and breaks down crying in his arms. He holds on to her and comforts her.
Highway leads his well-motivated Marines into a competition against 1st Platoon, parachuting to a designated target, the Marine Bear Pit, to earn a 72-hour liberty. He even got the afraid-of-heights Swede to skydive by admitting he was afraid of heights, too. (HIGHWAY: Jumping out of a perfectly-good aircraft is not a natural act, so do it right and enjoy the view.) Recon and 1st Platoon get there at the same time, and despite Powers' insistence Choozoo make 1st Platoon the winner, Choozoo goes to a tiebreaker: Matchup. Both units get in the Bear Pit and fight each other to remain there. The battle eventually came down to Jones vs. 2 of 1st Platoon's men. They got Jones under control and had him out of the Bear Pit until Jones grabbed their crotches hard and pulls them out instead. Highway thought Recon won, but Powers said Jones cheated.
HIGHWAY: I say he improvised.
POWERS: He cheated!
HIGHWAY: He adapted, he overcame!
Choozoo decides to let Highway and Powers battle. Powers was happy to have the chance to put Highway in his place, but Highway eventually got the upper hand, giving Recon the victory. But Powers wasn't done. He sends Sgt. Webster, 1st Platoon sergeant, who had been kissing up to Powers from day 1, to get statements from Recon that Highway used live ammunition on the training exercises, even bribing them with weekend liberty. But they refuse to rat on Highway.
WEBSTER: Don't you boys want to go back to the way it was? Nobody f***in' with you?
JONES: Seems to me, nobody's gonna f*** with us the way things are now.
Aggie finds Highway at a Commanding Officer's party and they enjoy a nice dance. Highway admits to reading the magazines and is trying to understand how women think, hoping he could reconcile with Aggie. However, Aggie tells him Roy asked her to marry him. Before Highway finds out her answer, his unit is immediately activated for mobilization for the 1983 invasion of Grenada.
On the hangar bay of the USS Belleau Wood, Ring briefs the men of their mission: to helicast on the western side of the island of Grenada and recon in advance of the battalion landing team. Despite their nervousness about seeing real combat, Recon boards the UH-1 Huey and land on the island. While advancing inland they make hostile contact with forward patrols and machine gun fighting positions of Cuban soldiers and come under heavy fire. Highway improvises, ordering Jones and Fragetti to use a bulldozer to provide cover so they can advance on and destroy an enemy machine gun nest. The recon towards the university as ordered and secure the area, allowing the students to leave.
Highway, Ring, and the platoon are then ordered to recon a hill where air support spotted an enemy arsenal. Caught under fire, Ring and the platoon make the mistake of trapping themselves in a structure rather than staying out of sight. A blast from a HRAKM armored tank knocks out their radio and kills their R.T.O. (radioman), Profile. Ring is beside himself for leading the men into a trap and getting Profile killed, but Highway gets him to refocus. Ring finds a telephone they could use to order an air strike by calling Camp Lejeune long-distance, but Jones has to go on the roof to find where the line is cut. (JONES: I almost got my ass shot off for Ma Bell!) Highway goes out to light a smoke marker to tell their position, not knowing if Ring was successful, and is hit by enemy fire. The men look to Ring to lead, which he does by leading them out to get the unconscious Highway. But the air strike came through, and Highway was OK.
HIGHWAY: Jones, just because we're holding hands doesn't mean we're going to take long showers into the wee hours of the morning. You get me?
Buoyed by their success, Ring decides to take the hill, despite Powers' orders to the contrary. They make their way to the rebel position, destroy it, and capture the men inside while Highway enjoys a cigar he took off of a Cuban soldier, proud to see his men become real Marines. When Powers finds out, he bawls them out and threatens Highway with a court-martial, even ready to assault Highway himself, but Highway remained defiant.
HIGHWAY: With all due respect, sir, you're beginning to bore the hell out of me.
Their commanding officer, Colonel Meyers, arrives, and Powers has no problem telling Meyers that Ring and Highway disobeyed direct orders. Meyers asks where Powers came from and Powers said he came from Supply and was good at it.
MEYERS: Well then stick to it, because you're a walking cluster-f*** as an infantry officer. This is Marine Amphibious Unit, Major. My men are hard chargers! Lt. Ring and Gunny Highway took a band of young fire-pissers, exercised some personal initiative, and kicked ass!
Highway and his men return to the U.S. and are met by a warm reception. Aggie is there to welcome him back, too. To Highway's mock dismay, Stitch informs him that he is going to give up his music and make a career for himself in the Marines, while Highway takes his mandatory retirement. All of the Marines are celebrating with friends and family as Highway and Aggie walk off into the distance of airplane hangars.