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While playing on his Wyoming homestead, young Joey Starrett spies a lone rider approaching his house, then listens with great curiosity as Shane, the buckskin clad stranger, reveals to his father Joe that he is heading north, toward home. When Joey cocks the rifle he has been toting, Shane, startled by the noise, draws his gun with the speed of a gunslinger. Joe is disturbed by Shane's behavior and, as a group of men ride up, sends him on his way. The men's leader, grizzled cattle baron Rufe Ryker, accuses Joe of squatting on his grazing land and demands that he give up his homestead. When Joe refuses, Ryker's men start to intimidate him until Shane suddenly reappears at Joe's side. The men depart, and Joe's wife Marian, who has observed everything from inside the house, urges Joe to invite Shane to dinner. Joey is thrilled to have Shane spend the evening with them, and at the end of the meal, Shane, reticent to talk about his past, goes outside to chop wood for the family. Joe joins in and the next day, the two men team up to pull a stubborn tree stump out of the ground. Later, Joey tells Shane that his parents want him to stay and innocently lets on that his father is concerned about Ryker's threats. Shane, who has put away his gun, agrees to remain and heads to town to buy work clothes. Soon after, homesteader Ernie Wright arrives at the Starretts' to announce that Ryker's men have destroyed his wheat field and, consequently, he and his family are moving away. Joe begs Ernie to stay and calls for a meeting of the homestead men that night. Meanwhile, in town, Shane purchases clothes at Sam Grafton's general store, then orders a soda pop in the adjoining saloon. There, Chris Calloway, one of Grafton's men, calls Shane a "sodbuster" and tosses a glass of whiskey on his new shirt. Shane does not react to Calloway's provocations, however, and walks out. That night, during the meeting, Joey overhears homesteader Fred Lewis, who witnessed the saloon exchange, declare that Shane did not stand up to Calloway. Marian reassures Joey that Shane is not a coward, but counsels him not to become too attached to him. Later, having decided to stick together as a group, the homesteaders and their families go to town to shop for the next day's Fourth of July celebration. At Grafton's, Calloway again confronts Shane in the saloon, but this time, Shane throws two drinks on Calloway and slugs him. After a grueling fistfight, Shane finally knocks out Calloway and is offered a job by Ryker. When Shane declines, Ryker accuses him of lusting after Marian, and despite pleas from Joey, Shane single-handedly takes on all of Ryker's men. Joe aids Shane in the fracas, until Grafton, fed up with the destruction, demands a halt. As the homesteaders depart, Ryker vows to fight on and sends for notorious Cheyenne gunslinger Jack Wilson. Back at home, Joey gushes to Marian about his love for Shane, while Marian wrestles with her growing romantic feelings for the loner. The next day, after Joey admits to Shane that he sneaked a peek at his gun, Shane gives the boy some pointers on how to shoot and demonstrates his skill as a marksman. Though impressed, Marian expresses her disapproval of guns and asks Shane not to encourage Joey's interest. Ernie, meanwhile, complains to neighbor Stonewall Torrey that because Ryker's men killed his sow and ruined his fields, he is giving up. Angry, Stonewall, whose courage has been questioned by some of the homesteaders, goes to town and, in the saloon, criticizes Ryker for running Ernie off his land. Later, at the Fourth of July party, Joe and Marian also celebrate their tenth wedding anniversary, and Marian shares a dance with Shane. When Stonewall arrives and announces that Ryker has hired a gunfighter, Shane guesses he is Wilson. Back at their house, the Starretts and Shane are met by Wilson, Ryker's brother Morgan and Ryker, who in an attempt to appear reasonable, offers to sell Joe his land. Joe angrily rejects the idea, pointing out that the government already recognizes the homesteaders' claims. In turn, Ryker complains that because he fought the Indians and slaved to make the land livable, he is entitled to own it, without fences. Ryker and Wilson depart peacefully, but in town, Ryker instructs Wilson to do whatever is necessary to defeat Joe. To that end, Wilson provokes a confrontation with Stonewall, then shoots him down when he makes a half-hearted move for his gun. With the nearest lawman a three-day ride away, Wilson's claim of self-defense goes unchallenged. At Stonewall's funeral, the Lewis family announce that they, too, are leaving their homestead, but Joe and Shane beseech their other neighbors to keep fighting. Just then, a fire is spotted at the Lewis place, and Ryker's blatant sabotage strengthens Joe's resolve to stop Ryker at any cost. That night, Ryker sends for Joe, while Joe prepares to challenge Ryker at gunpoint, ignoring Marian's tearful pleas not to risk his life. Shane, who has been warned about Ryker's plans by a reformed Calloway, dons his buckskins and straps on his gun, then fights Joe to keep him from leaving. When Shane hits Joe in the head with his gun butt, a terrified Joey screams hatefully at him, but Marian is relieved. Joe is knocked out, and aware that she will not see Shane again, Marian says a grateful goodbye. Joey trails Shane to the saloon and sees him goad Wilson into drawing his gun. Shane shoots Wilson dead, then shoots Ryker when he draws, and with Joey's help, outdraws Morgan. Later, Joey apologizes for his angry words and begs Shane to return to the homestead. Gently declining, Shane tries to explain to the boy that he cannot change the man he is at heart and does not belong there. As Shane mounts his horse and rides off, Joey, devastated and confused, cries after him to "come back."