The movie begins on Oct. 25, 1958, at a fancy dinner tribute to Edward R. Murrow (David Strathairn). Its the usual gala affair, everyone is dressed up and looking expensive. Ed Murrow is introduced as a hero who fought against McCarthyism. Ed comes out and proceeds to make a speech about how journalism has become occupied with presenting only good news and how journalists have succumb to escapism, losing touch with the real world. This attack makes the audience uncomfortable and Fred Friendly (George Clooney) looks like hes having a good time.

Flashback to 1953. Joe Wershba (Robert Downey Jr.) and Shirley Wershba (Patricia Clarkson) are alone in the copy room; someone walks in and jokingly asks what people might think. Joe takes Shirley aside and tells her about a loyalty (to McCarthy or the government) oath she must sign, or he may get fired. After some thought, she agrees and they kiss.

The newsmen are in a conference room, trying to decide news pieces for the next show. People mention some McCarthy related topics, but are immediately shot down given the controversy involved. Someone brings up the topic of an air force officer in Chicago, who was dismissed from the air force because his father was deemed to be a communist or have communist ties. At his trial, all charges and evidence were in a sealed envelope, which no one saw. The Air Force Officers rights to a fair trial were clearly violated, as he didnt even know the charges against him and was found guilty anyway. The newsmen are reluctant to pursue this, afraid of a backlash from McCarthy. They agree to send two people to Chicago to get some footage and decide from there. Later, the crew is watching footage of the Air Force Officer saying that he would not want his kids to be persecuted for the affiliations of their parents and have to denounce their own father. Ed, Fred, and a third man, are in a room, trying to decide whether to run the piece. Ed is completely for it, while the third man is opposed, mentioning their sponsorship from Alcoa, who is dependant on government contracts. Fred seems to be ambivalent, but trusting Ed. They decide to run it as a piece against the infringement of civil liberties and not mention McCarthy. Fred is met in his office by two Colonels, who proceed to berate him about jeopardizing national security, interfering with government business, etc. Fred asks the Colonels if they know the contents of the sealed envelope and they clearly dont. The story runs; Ed comments on the sealed envelope, and closes with his signature Good night and good luck. We see a bit of the show that runs after Eds, its Don Hollenbeck (Ray Wise) praising Eds courage and reporting. There is a tense moment as everyone waits for the phones to ring and none do. Someone in the back asks if he should turn the phones back on and the tension is eased. The phones start ringing off the hook.

Later, the crew, along with Don, is having drinks at a bar and decides to get the early edition newspaper reviews of the show. The first one comes out very good, the second one not. Some people look relaxed, some angry, but Don looks very uneasy.

William (Bill) Paley (Frank Langella), boss at CBS, summons Fred to his office and chews him out for the piece, mentioning their sponsorship from Alcoa. However, Bill doesnt actually ask Fred to stop reporting on McCarty issues; he seems to both enjoy yelling at Fred and also trust Freds judgment. Joe and Shirley are getting ready for work, before Joe leaves, Shirley reminds him to take off his wedding ring. It turns out that they are secretly married, which is against company policy. Later, Joe is approached by someone from the government, who warns Joe about running future McCarthy pieces, saying, "What if I told you that Ed Murrow was on the Soviet payroll in 1932?"

The crew decides to run a direct attack on McCarthy. McCarthy is holding a senate hearing on a woman who supposedly works in the Pentagon Code Room and is a Communist spy. Although the hearing isnt a real trial, they get the woman fired from her job. The woman in the hearing doesnt actually work in the Code Room and denies any Communist ties. Apparently, an FBI agent saw her name on a Communist mailing list and that is all the evidence they are going on. The news crew point out several things wrong with the hearing: the woman has the same name as three others in the phone book and McCarthy himself leaves the hearing after a few questions. All of these facts are brought to light in Eds show, and Ed volunteers to give McCarthy a chance to defend himself on the show.

McCarthy takes up the offer and basically uses the show to make a series of accusations about Eds ties to Communism: a writer with communist ties had dedicated a book to Ed, Ed was on the Soviet payroll in 1932 for some foreign exchange program, and Ed is a card carrying member of the International Industrial Workers association, which is known to be communist. Ed uses the next show to rebut: he was a friend of the author despite their different beliefs, he doesnt deny the second charge, and the third charge is untrue. Ed also says that since McCarthy didn't refute any facts Ed reported about him, the world can assume they are true.

The newsmen are sitting around and find out that the Air Force Officer from the first story was reinstated back to the army. At the same time, they also learn that Don Hollenbeck has committed suicide, apparently the pressure was too much for him. In other news, the Senate declares an investigation on McCarthy.

Joe and Shirley are called into the editors office and are told about an upcoming layoff. The editor mentions that it is against company policy for two employees to be married and everyone knows they are married. In a happy moment, the two put their rings back on and Joe decides to quit. Bill Paley calls Fred and Ed into his office tells them that CBS lost the Alcoa sponsorship and will have to lay a lot of people off. Ed yells at Bill for his trying to censor them, but Bill responses that he showed his reservations, but had never stopped them from running a piece. Bill tells Ed that his show will be cut from 1 hour to 30 minutes, moved to Sunday afternoon, and Ed will only do five more shows. Ed and Fred walk to the elevator and say that they might as well go out with a bang in their last five shows. Fred mentions that Joe and Shirley were married and Ed seems to be the only one who didnt know.

Cut back to Oct. 25, 1958. Ed finishes his speech saying that journalists are the ones with the responsibility to keep the public informed of the real world, regardless of its unpleasantness. Good night and good luck.