The film opens at Devon School. Gene Forester and his roommate Finny are in their room one night, Finny sleeping, Gene reading, when Brinker Haldey and several other boys take them out of their room. Somebody from down the hall watches the entire thing. The boys are delivered to a mock trial. Finny complains stating that there's nothing to investigate.
Flashback to several months earlier. Gene arrives at the prestigious Devon Prep school and contemplates how he arrived on the same level as these rich kids. He meets his roommate, Finny, a good looking athlete, and his friends Brinker, the top of the class, and Leper, who shows Gene his snail collection and snail house.
The boys make up a game called Blitz Ball, in which there are no rules and Finny makes it up as he goes along. They arrive at a tree, where seniors are practicing jumping out of enemy troopships under the aid of the ancient Fitzwinkler. The seniors leave and Finny decides to jump from the tree like the seniors. He coaxes Gene into following suit and tells him that rules are made to be broken.
Gene soon discovers through his teachers that his grades are not up to the Devon standards, and so, pushes harder to study. One night, Finny decides to put the radio on, distracting Gene. Brinker and Leper appear dressed like Nazis, Leper like Adolf Hitler, and they dance and make fun of the Germans.
At a headmaster tea, Gene watches Finny show off his outlandish pink shirt and tie which he used as a belt to the headmaster. He gets away with it, and the two go to jump some more from the tree. They decide to make a "suicidal" society where the students all jump out of the tree. Gene pulls his grades up.
Finny invites Gene to go swimming with him and he beats the school record for the 100m dash. Only problem: Gene was the only person to see it. He tries to convince Finny to do it again with the timekeepers and the coach there, but Finny states he did it because he wanted to. They then go to the beach and camp out. Unfortunately, Gene has missed studying and the instruction for a math test that next morning, and fails. Finny states it's a mere fluke and that Gene will always pull through. He guesses that Gene wants to beat Brinker as top of the class. Gene suddenly begins to suspect that Finny secretly wants him to fail - Finny is a D student.
The day comes when they convince Leper to jump from the tree. Finny tries to get Gene to come, but Gene insists he needs to study. Finny doesn't understand, thinking that things come naturally to Gene like they do to him. Gene states that Finny wouldn't understand, and he and Finny leave for the tree. Leper isn't there, and so the two decide to do a side-by-side double jump. Finny steps out first, and in a moment of rage, Gene shakes the tree limb. Finny loses his balance and falls. Suddenly, Gene regrets what he did.
Finny will be OK, says Brinker, quoting the doctor. Finny's leg is shattered and sports are done for him. Gene states that's not fair, because it's what Finny lived for. Nobody suspects that Gene was to blame. Gene visits Finny and tries to tell him what really happened, but the doctor interrupts stating that Finny needs rest and that he's being sent home.
Three weeks later, the fall session ends, and Gene visits Finny at his house - mansion is more like it. He tries once again to tell Finny what actually happened in the tree, but Finny won't believe it stating he'd "kill" Gene if he didn't shut up. Gene leaves shortly after.
Leper, Brinker, and Gene go apple picking to help out a local farmer who states that his youngest son came home and he buried him under his favorite tree. He gives Leper his youngest son's army cap. Finny calls long distance and Gene and he talk. Finny states that if he can't do sports, Gene needs to do them for him and take part in the Devon Winter Olympics. Brinker becomes suspicious of the accident and Gene hears him discussing the mystery with the other boys.
It begins snowing, and the students are sent to help shovel snow on the railroad tracks. Leper, meanwhile, is touring on skis to find a beaver dam. Brinker then announces to Gene that he's going to enlist for the army, and wonders if Gene will come along too. Gene agrees and Finny arrives back. The day of enlistment comes, but with Finny's return, Gene changes his mind, making Brinker more curious about Gene's character. Finny begins training Gene for the school Olympics, stating that he once had aspirations to be in the real Olympics.
The students watch a movie about the Ski Troops in the war, and Leper is the first one to enlist upon seeing. He gives each of his friends a present. For Finny: the snail house. For Gene: a new alarm clock. For Brinker: His deer stalker cap. He then leaves. The students read the headlines on the war and wonder what Leper could be doing. Finny then states his dislike for the war.
Shortly after, Gene witnesses a raggedy Leper creeping through the school courtyards. He gives chase and finds Leper living in a small shelter made from sticks and leaves. Leper states he was kicked out of the army and he could never go back. He said he was seeing things and that he needs a friend, but then goes on to state in Gene's face that Gene is incapable of friendship. In rage, Gene hits him and tells him to shut up. Leper knows the truth. Gene then leaves Leper alone.
Later on, Gene and Finny return to their dorm to see the snail house destroyed. Whilst cleaning it, Gene discovers letters from people in the army addressed to Finny. Finny announces that he always wanted to go to the army, but his leg prevented him from doing so, and he tried to pretend that the war never existed.
We then return to the beginning of the film. Gene and Finny are taken from their room, and we see the figure watching them. It is Leper. Brinker interrogates Gene and Finny about the incident in the tree, but Finny denies Gene ever doing anything, and Gene agrees, but Leper appears and states that he was at the bottom of the tree. They didn't see him. One moved up and the other moved down, like a piston, and Finny fell. Finny declares that it's nonsense and storms out, only to trip on the marble stares and falling, breaking the same leg.
He's taken to the infirmary, and Gene tries to see him, but Finny declines him. The next day, Gene visits him and tells him the truth. Finny states that it wasn't Gene, but a dark side of him. No grudge or hate towards him, just madness. They make up, and the doctor states to Gene that he'll be moving and fixing Finny's bone - a cleaner cut this time - and he can come back around five.
Gene goes swimming again and thinks about all that Finny had told him. When he returns the doctor announces that the cut was so clean that anybody could have mended it. He says that some bone marrow must have gone straight to Finny's heart, which in turn, killed him. Gene is taken over with guilt.
He and Brinker are the only two by the end, and Gene announces that he is going to enlist. Proud of his pluck, Brinker shakes his hand and wishes him luck. Gene packs up and looks at his room. Whilst leaving, he states that Finny taught him how not to be at war with himself and to move on. His last line is: "And so I will, Fin."
And the movie ends.