As the film opens, we meet Louise (Susan Sarandon), a waitress in a diner-style restaurant. She phones her friend Thelma (Geena Davis) and makes reference to a vacation they are about to take together where they will retreat to a friend's rural cabin for the weekend. Thelma is married to a moronic hothead named Darryl (Christopher McDonald), and she is too timid to even tell Darryl that she is going away for the weekend. Instead, she waits until Darryl leaves for work and then writes a note. Louise is unmarried, although she does have a boyfriend named Jimmy (Michael Madsen). Her relationship is not the type that she has to explain anything to Jimmy; it is clear that Louise is an independent and headstrong woman, while Thelma is passive and naive. Perhaps out of fear of being in the woods with no man around, Thelma brings along Darryl's handgun. Together, the two friends set out in Louise's 1966 Thunderbird convertible.
Before they have reached their destination, Thelma wants to stop at a roadhouse and have a few drinks. Although Louise does not want to do this, she warily agrees, seeing as it is Thelma's vacation, too. While there, the two women meet a man named Harlan (Timothy Carhart), who takes an interest in Thelma and flirts with her all evening. After Thelma has had too much to drink, Harlan sneaks her away from Louise and takes her out to the dark parking lot, where he attempts to have sex with her. When Thelma protests, Harlan becomes violent and attempts to rape her. He is interrupted by Louise, who appears brandishing the gun. Harlan tries to explain that they were just having fun, Louise warns him that when a woman protests a man's sexual advances, "she isn't having any fun." Although she is able to get Thelma safely away from Harlan, he claims that he wishes he had raped Thelma after all, and Louise immediately shoots him dead. Horrified, Thelma ushers Louise into the car and they drive away.
Harlan's body is soon discovered, and it does not take the authorities long to connect Harlan to Thelma and Louise, since many people in the bar saw them together. The waitress who served them says she doesn't think they were the type to commit murder. A state police investigator named Hal Slocumb (Harvey Keitel) is assigned to the case and immediately seems sympathetic to Thelma and Louise; something about the incident does not add up, and he seems to suspect already why Harlan was shot.
Thelma and Louise check into a motel and regroup, still in shock over the incident. Thelma feels that what happened was not their fault, and she wants to go to the police, but Louise is convinced that nobody will believe her side of the story and will charge her with homicide, particularly since Harlan wasn't threatening them any longer when she shot him. She is also cynical about how Thelma's story of attempted rape would be received; she knows they were seen drinking and dancing with Harlan, and she feels this would make others feel that Thelma led Harlan on. Unwilling to cooperate with authorities, Louise decides instead to contact Jimmy. She tells him she's in trouble and she needs money; she asks Jimmy for a loan that matches her life savings, to be repaid later, and Jimmy agrees. She asks him to wire the money to her in Oklahoma City. Although she doesn't tell Jimmy any details, she plans to stay on the run and cross the border into Mexico. Thelma is confused when Louise tells her that she doesn't want to go through Texas to get to Mexico, but Louise becomes furious about it and insists that Thelma find another route.
At a gas station, Louise asks Thelma to call Darryl, and when she does he refuses to even listen to her; he orders her to return home immediately, at which point Thelma curses him and hangs up. Before leaving the station, Thelma strikes up a conversation with a handsome hitchhiker. Thelma is especially interested in him, and eventually she convinces Louise to offer him a ride. His name is JD (Brad Pitt), and he immediately charms Thelma. Louise is wary of him from the very beginning, at first refusing to give him a lift but then relenting when they happen upon him again by chance. Along the way to Oklahoma, Louise narrowly avoids being spotted by state police, alerting JD to the fact that something is going on with them.
They stop at another motel, where Louise has arranged to pick up Jimmy's wire transfer. Instead she finds Jimmy himself waiting for her; her strange behavior has made him anxious to see her in person. Jimmy rents a separate room for Thelma, and Louise entrusts her to guard the cash, which is in a large envelope. After Louise leaves for her own room, JD reappears and Thelma invites him in. The two of them make love, and JD reveals to her that he is a semi-professional thief who makes his living holding up small convenience stores. He delights Thelma by running through the speech that he uses to hold up his victims, and Thelma remarks how polite he is about the whole thing.
Meanwhile, Louise and Jimmy have a soul-baring conversation about their relationship. Jimmy is infuriated when Louise refuses to tell him what is going on, and he awkwardly proposes to her. Louise is conflicted; although she is touched at Jimmy's interest in marrying her, she knows that her circumstances prevent it, and she isn't even sure she wants to marry Jimmy. The matter remains unresolved; in the morning, she sees Jimmy off from the hotel's coffee shop, both of them knowing that it may be the last time they see one another. Immediately after Jimmy leaves, Thelma appears, noticeably giddy and dazed. Louise is amused that Thelma has enjoyed a night of sex with JD, until Thelma reveals that she has left him alone in the hotel room with the money. They rush back upstairs to find both JD and their money gone.
Louise is devastated, since now it seems as if she will have no choice but to surrender. Without money, she and Thelma have no other options. Thelma, however, seems galvanized by the experience. She takes charge and orders Louise to get her belongings together and they leave the hotel.
Meanwhile, Hal Slocumb has visited Louise's apartment, and since he feels the women may have left the state, the FBI is called in. Hal and several FBI agents stake out Darryl's house, tapping the phone in anticipation of Thelma eventually calling home.
JD is picked up and brought to Hal for questioning, and Hal speaks privately with him. Even though he knows Thelma and Louise are fugitives, he is furious with JD for interfering with their security by taking their money, and JD apparently cracks and tells him everything he knows. JD has a brief confrontation with Darryl, who is also at the police station, and is furious with him for sleeping with Thelma. Slocumb and the others are amused by Darryl's ridiculous antics.
Shortly after leaving the hotel, the women pull up alongside a small gas station with a convenience market. Louise is still so shaken up over their latest setback that she can hardly speak; Thelma borrows her sunglasses and goes inside. After only a few minutes, she comes running out of the station, screaming for Louise to start the car, and the two of them speed off; Thelma has robbed the gas station, making off with an undetermined amount of money. Louise is shocked, and wonders how Thelma did it.
Immediately we cut to Darryl's house, where Darryl, Hal, and the other FBI agents watch the security camera video of Thelma robbing the market; they are stunned at how cool and professional she seems, unaware that she is reciting JD's robbery speech almost verbatim. Louise decides they need to find out if the authorities are onto them, so she tells Thelma to call Darryl. "Hang up if it seems like he knows anything," she tells her. When Darryl greets her with a cheery "Hello", Thelma immediately hangs up, saying "He knows." Louise thinks for a moment and then dials the number again; when Darryl answers, she asks to speak to whoever is in charge, and Hal talks to her. She speaks bluntly to him, which Hal seems to admire. Hal informs them that they're not wanted for murder, only for questioning, although Thelma is now wanted in Oklahoma for armed robbery. Louise hangs up before the call can be traced. While driving away, Thelma recalls the incident with Harlan and asks Louise again about Texas; Thelma is sure Louise was raped there. But Louise is adamant, and icily tells Thelma that she won't talk about it, and to never ask her about it again.
Later, Louise is pulled over for speeding by a state policeman. When the cop takes her into his car and tries to call in Louise's registration on his radio, Thelma appears and puts the gun to his head. She tells Louise to take his gun and shoot out his radio, then they lock him in the trunk of his cruiser and speed off. After leaving the state, Louise calls Slocumb again at Darryl's house. She tells him that the whole thing was an accident, and Hal believes her, but since she is unwilling to return for questioning, he informs her that they will be charged with murder. He also makes a shocking statement to Louise: he knows what happened to her in Texas. Thelma hangs up the phone, worried that Louise has been on too long. Sure enough, the FBI has traced the call, and they try and head off without Hal to bring the women in. Hal convinces them to bring him along anyway, feeling some sort of connection to the incident, especially to Louise.
Thelma has a moment where she embraces her new life; she worries that Louise will make a deal with Slocumb in order to return to her old life and possibly reconnect with Jimmy. Thelma herself feels that she can never go back to the way she used to live, not now that she has tasted freedom. Louise vows that she is not considering any deals, and that the two of them will stay together.
Throughout the film, the women have encountered an obnoxious male trucker while on the road. The man has made obscene gestures at them and lewdly tried to suggest some kind of sexual activity with them. At this point, they see him again and decide to take care of him once and for all. They tell him to pull over for some fun, then they confront him about his behavior and demand that he apologize. When the man becomes indignant, they fire on his rig's gas tank, blowing his truck and trailer sky high in a huge explosion. The man calls them "bitches from Hell" and collapses in disbelief.
With the burned out rig as a very noticeable indicator of their presence, the women are soon spotted by highway patrol and pursued by many cars. After a high speed chase, Louise manages to briefly shake the entire brigade by driving under a very low pipeline overpass. The Thunderbird barely makes it, but the police cars are trapped behind the pipeline. Momentarily alone, Louise and Thelma seem to realize that they cannot escape from the police, and they find that their only path leads them upwards into a mountainous region. They find themselves trapped when they reach the top, which offers no escape; they are on the brink of an enormous canyon.
The state police and the FBI are right behind them; a large helicopter appears in front of them, one of the passengers being Hal Slocumb himself. The police dig in behind the Thunderbird, forming an impassable barrier. All of the troopers and FBI agents draw their weapons and train them on the Thunderbird. Hal is upset, understanding that this much firepower is unnecessary to confront these two women. Inside the Thunderbird, Thelma and Louise have a discussion. Louise says that she refuses to surrender, and Thelma once again realizes that she will now lose the freedom that she so briefly experienced. She tearfully suggests to Louise that they "keep going", gesturing at the canyon. Louise realizes that Thelma is suggesting that they die together, and she seems to agree. Overcome with emotion, she embraces Thelma and kisses her in friendship, and she slams on the gas pedal, driving full speed ahead. Hal realizes what they are doing and runs after them, but he is too late. As Louise and Thelma hold hands in defiance, the car flies off the edge of the cliff. The frame freezes as the car flies through the air, then fades to a white screen. As the credits start to roll, various scenes of Thelma and Louise's past few days "flash before our eyes."