New England, the late 1950s. Todd Anderson (Ethan Hawke), a lonely and painfully shy teenager, who is under pressure by his stern parents because he must live up to his older brother's reputation to attend Yale and become a lawyer, arrives for the new semester at the Welton Academy for boys -- Todd's brother also attended Welton and was a popular and well-regarded student there. This semester begins during an orientation gathering with a speech given by the stern Headmaster Nolan (Norman Lloyd), who states the academy's four pillars: Tradition, Honor, Discipline, and Excellence. Todd meets Neil Perry (Robert Sean Leonard) an ambitious student whom becomes his dorm roommate.
Later in his dorm, Neil is ordered by his grumpy and domineering father (Kurtwood Smith) to drop his involvement with the school annual in order to maintain good grades so the boy may become a doctor much as he has done. Neil is under pressure from his stern father's will. Also, Mr. Perry tells Neil that Mrs. Perry also wants him to become a doctor, which further worries the boy. A little later, Todd tells Neil that he is in a similar situation with his parents involving his older brother who also attended Welton a few years ago, graduated, and attended Yale Law School and became a lawyer and his parents want the exact same thing for him. But Todd does not have the courage to tell his parents that he instead wants to be a writer, not a lawyer.
During the first day of classes Todd and Neil experience the various teaching methods which include speeches by the trig teacher, as well as the Latin teacher, and the math teacher who states that "all 20 questions at the end of the first chapter are due tomorrow". In stark contrast to these orthodox teaching methods, the guys see a different side of the school when they attend English class taught by the newly arrived (and liberal-minded) Mr. Keating (Robin Williams), whom they met briefly during the orientation -- Keating tells his class he was also a student at Welton ("Helton" as the students secretly refer to the institution) himself many years ago. Keating enters his class whistling the 1812 Overture, and he first takes the boys out in the hallway to the school's displays cases containing artifacts of the school's sports achievements. He tells them that they all have the potential to become powerful individuals, and they are responsible for what their futures will hold. These two actions show his difference from the other teachers because no other teacher would commit the actions he does. Also, he tells the boys they may call him "Oh Captain, my Captain", if they dare. These examples of Mr. Keating's teachings show the boys how to think for themselves. Mr. Keating then tells the boys "Carpe Diem", which is Latin for "seize the day".
In addition to Todd and Neil, a small group of other students whom include the lovesick Knox Overstreet (Josh Charles), the flip Charlie Dalton (Gale Hansen), the pragmatic Richard Cameron (Dylan Kussman), liberal Steven Meeks (Allelon Ruggiero) and the moderate Gerard Pitts (James Waterston), also react to the first day's lesson with comments from "that was weird" to "neat". Cameron asks if anything Keating told them will be on a future test and the boys respond with mild scorn.
The next day Keating starts the class with a traditional teaching approach by having Neil read out loud the introduction to their poetry textbook, which describes how to rate the quality of poetry according to mathematical plotting. Keating finds such mathematical criticism ridiculous and instructs his pupils to rip out the essay which is one of three ways that he demonstrates freedom of expression and non-conformity. When some students hesitate, he tells them "this is not the Bible. This is a battle, a war. You will have to learn to think for yourselves." He later has the students stand on his desk as a reminder to look at the world in a different way.
A few days later, Knox Overstreet is asked to attend a dinner party at the Danburry household, friends of his parents. When he arrives, a beautiful girl answers the doorbell and intently captures his attention. Later, he learns that the girl, Christine, has boyfriend named Chet, but does not give up the hope of dating her.
One day, Neil finds an old Welton yearbook with Mr. Keating in it. After seeing that Mr. Keating listed "Dead Poets Society" as one of his activities at the school, the boys ask Mr. Keating what this was. He replies that the DPS was a secret club dedicated to taking the meaning out of life. To do so, the members would sit in a cave near a certain pond less then a mile from school grounds and recite poetry, philosophically drawing life lessons from it to enhance their lives and appreciation of literature. With this new idea in their head from asking Mr. Keating what the DPS was, Neil and the boys decide to start up the DPS once again.
While coming inside after recess, Neil convinces the boys to join the DPS and meet at midnight by the creek to start their first meeting. Todd tells them that he will come along to the meeting as long as he does not have to read any poetry. When they arrive at the cave, the boys hold their first meeting. Knox shows up so that he can build confidence, like learning pretty poetry, to swoon Christine Danburry.
During their next poetry class, Mr. Keating makes the boys stand on his desk to see the world from a different perspective, which is another way he demonstrates non-conformity and freedom. At the end of class, Mr. Keating orders the boys to write an original poem for homework which will be read aloud during Monday's class.
Keating's unorthodox teaching methods soon circulate quietly among the other teachers who scorn his liberal and ideal methods. During a dinner, the Latin teacher tells Keating, "you are taking a big risk in making your students think they are artists". Keating replies: "I'm only trying to make them free thinkers". The Latin teacher rebukes him by saying, "free thinkers at age seventeen?", reciting some poetry from a realist poet to emphasize his point. Keating recites another line "It is only in their minds that men can truly be free. T'was always thus, and always thus shall be."
Neil attempts to seize the day by trying out for a part in the play 'A Midsummer Nights Dream' the school is putting on -- such an act is done in full defiance of his father's wishes. Meanwhile, Knox goes to a nearby public high school football game and sees Christine in the arms of Chet, who is a football player at that school.
Back in English class, Mr. Keating has the boys kick soccer balls while yelling poetry aloud, the final way that he demonstrates freedom and non-conformity. Then, Neil receives a letter that says he got the part of Puck in the play. Now he must forge a letter of permission to the headmaster and Mr. Perry, along with their signature of approval.
The next day in class, Mr. Keating tells Todd to stand up and recite his poem. When Todd tells his teacher that he did not write a poem, Mr. Keating tells the boy to make one up right now on the spur of the moment. Todd's new poem is about the picture of Walt Whitman on the wall, and Mr. Keating seems to have an astounding affect on Todd. Todd improvises with Keating's aggressive but kind coaching and he refers to Whitman as the "snaggly-toothed madman." The rest of the class, including one of the more cynical students applaud Todd's efforts. By pulling the boy out of his seat in front of the class and create his own poem, Mr. Keating successfully reaches out to Todd and builds his confidence.
That night, the boys meet at the cave to hold another DPS meeting, and afterwords Knox gets the courage to phone Christine, who invites him to a party at her house.
The following day, Mr. Keating teaches tells the boys not to conform, and Todd gets the same desk pen set from his parents that they got him last year for his birthday. Neil finds Todd sitting alone and disappointed and boosts his roommate's confidence by telling him that he should take the desk set and throw it to see how aerodynamic it is. Todd's mood is instantly improved.
When Knox goes to Christine's party that night, he becomes drunk and finds himself sitting next to a mostly unconscious Christine on the couch. He recalls Keating's words "carpe diem" and kisses her, only to be caught by Chet, who punches him out. Though Christine comes to his aid, Knox leaves the party.
The day after the DPS meeting, which is also attended by some girls Charlie invited, Dalton writes a joking and anonymous letter on behalf of the DPS to the school asking if girls may be admitted to Welton Academy. During a hastily arranged school meeting which addresses this letter, a phone is heard ringing. Charlie pulls out a hidden phone, answers it and says the call is from "God" and that God wants girls to attend Welton. The school's headmaster holds a private meeting with Charlie, demanding to know who is in the DPS. Charlie refuses and the headmaster paddles him harshly. The headmaster later talks to Keating, telling him he is aware of Keating's unorthodox teaching methods and that encouragement of free-thinking among the students is dangerous. Keating later talks to Charlie and the boys, telling Charlie that "sucking the marrow out of life doesn't mean choking on the bone." Pranks like Charlie's can have the effect of hurting a student's future rather than making them a school legend.
When Neil's father arrives at Welton on an unexpected visit, he scolds Neil for joining the play and orders him to quit. Neil tells Mr. Keating about the incident, and that his father won't allow Neil to act. To this, Mr. Keating suggests that Neil tell his father how the boy truly feels. Neil does, but his bossy and stubborn father continues to refuse to let him partake in the play and tells Neil that he must focus all his energy on studying to become a doctor. A few days later, Neil lies to Mr. Keating and tells him that his father allowed him to continue with the play.
When Knox goes to Christine's high school, he embarrasses her in class by giving her flowers and reciting poetry. Christine goes to Welton where she angrily tells Knox that his actions embarrassed her in front of her classmates. Knox apologizes and asks Christine if she would go to the play with him. Christine is again embarrassed, but flattered by the attention Knox displays, accepts his offer as a date.
At the theatre, Neil gives a great performance as Puck. As he is about to give Puck's closing monologue, Neil spots his father looking stern and angry from the back but receives a standing ovation. Neil is angrily driven home by his father, who also tells Keating to stay away from his son. While at home, Mr. Perry tells Neil that in retaliation for his defiance, he will pull Neil out of Welton and forcibly enroll him in Braden Military School to prepare him for Harvard University and a career in medicine. Unable to cope with the future that awaits him or make his stern and narrow-minded father understand his emotions, Neil commits suicide by shooting himself with his father's gun.
The next day in school, the boys are told of Neil's suicide and each is asked about the DPS after Cameron reveals the club's secrets to the headmaster. Dalton is expelled from the Welton Academy when he punches Cameron for betraying them. Cameron's defense of his actions is that they can all save their respective futures at the school if they cooperate, even if they can't keep Keating from being fired.
When Todd is called to Nolan's office, where his parents are waiting, Nolan forces Todd to admit to being a member of the Dead Poets Society, and tries to make him sign a document blaming Keating for abusing his authority, inciting the boys to restart the Dead Poets Society, and encouraging Neil to flout his father's authority. Todd sees Richard's, Knox's, Steven's and Gerald's signatures already on the document. At first, Todd refuses to sign, but when Nolan threatens to expel him and his equally stern parents refuse to take him back home should he be kicked out of school, the painfully shy Todd does not have the nerve to argue with any of them and signs the paper.
Keating is fired from Welton and is forced to leave without any severance pay or letter of recommendation to teach at any other public or private school in the state. Although the other teachers at Welton have disapproved of his teaching methods, most of them are somewhat upset to see Keating leave
The next day, Headmaster Nolan arrives at English class where he tells the students that he is their new teacher until a substitute will arrive to replace him. The shy and afraid Todd cannot respond when asked what the boys have done in the class so far, so Nolan asks Cameron. He tells the teacher that the class thoroughly covered poetry, but skipped over realism. The headmaster has the boys read the introduction, but it is ripped out, so he gives Cameron the teachers book to read from. Just then, Mr. Keating enters the room to collect a few of his papers before he leaves. Todd reveals to Keating that he and the other students were intimidated into signing the confession. Nolan orders Todd to be quiet and demands that Keating leave.
As Keating is about to exit the classroom, Todd finally breaks through his cowardice and self-pity and calls out: "O Captain! My Captain!" and then stands on top of his desk and faces Keating. Nolan warns Todd to sit down or face expulsion. In what is probably the movie's most touching and emotionally powerful scene, one by one, Knox, Steven, Gerard, and all of the members of the Dead Poets Society, except for Cameron and one or two other students, climb onto their desks and face Keating to salute their former teacher, and they remain standing on their desks despite Nolan's orders for them to sit back down until he gives up and slumps against the teacher's desk, angry and emotionally defeated. Seeing that his work at the school had not been in vain, a visibly touched Keating says: "Thank you, boys. Thank you." With Todd and the other the students looking on, Keating then happily leaves the classroom with tears in his eyes, and walks out of the school for good.