In 1880, in Lincoln, New Mexico, newly appointed sheriff Pat Garrett (Thomas Mitchell) is pleased to see his old comrade Doc Holliday (Walter Huston) arriving on the stage coach.
Doc Holliday has had his horse Red stolen and has a hunch the horse may be in Lincoln.
In town, they get a lead that a horse fitting Doc's description is tied up by the dentist's office. As they head that way, Pat has to deal with a gun waving drunk at the saloon. Pat's technique is to smile and feign friendship with one hand and punch him with the other. This is a recurrent habit with Pat, throughout the rest of the film.
The horse is in the possession of William Bonney, who says he bought it and is determined to keep it, despite Doc's claim that it was stolen. At the time William Bonney, known as Billy the Kid, was the most famous gunslinger of the southwest, wanted dead or alive. Billy was said to be charming, attractive and a favorite with girls.
Billy (Jack Buetel) is both good looking and polite, Doc is experienced and careful, so a gunfight is avoided despite each being inflexible, as each admires the other's reputation.
This does not sit well with sheriff Pat, who is unhappy that his youth is gone without having done anything notable. He was hoping to arrest Billy or take credit for having shot him dead. Frustrated, Pat orders both of them to leave Lincoln by afternoon the next day.
Doc and Billy proceed together to the saloon, a classic establishment for drinking and gambling and confrontations.
At the saloon, a young tough requests to talk with Billy privately, offering to help in setting a trap to assassinate Doc, but his intention is to kill Billy. Billy recognizes the deceit in the nick of time and shoots the young tough dead, in self defense.
Billy and Doc calmly continue drinking and playing poker. Doc wins more money than the horse was worth, so he is even in that respect. In a surprising turnaround, Billy and Doc become friends.
As Billy has practically no money left, Doc invites Billy to bunk with him for the night if he doesn't have a girl. Billy declines, choosing instead to bed down in the barn, in front of his horse.
A few moments after Billy takes the gun belt off his waist, a shadow is seen at a dark corner of the barn, and shots are fired towards Billy. Billy takes off his spurs, throws them, drawing shots, makes other noises, drawing other shots, and after the sixth shot he jumps on the shadow and overpowers someone. Billy realizes that he has overpowered and subdued a female, and he warns "Quit struggling, lady or the rest of your dress will get ripped" as he has his way with her, in the dark shadow. When things have calmed down, we get a clear look at bosomy and sultry Rio McDonald (Jane Russell) in the hay. Billy asks why, she explains that Billy killed her brother in a gunfight. He talks back calmly to her, saying he is sorry it happened but he had not sought the quarrel, and then it was kill or die. Rio makes no fuss or comment about being subdued and getting her dress ripped.
In the morning as Billy leaves the barn, he is surrounded by a group of boys fascinated by his reputation, and he shows off by shooting a hole lengthwise through a wooden stick.
Back at the saloon, he is again with his new friend Doc when Pat and a squad of deputies arrive wanting to arrest Billy for the previous day's killing, even though it most likely was self defense, as the other man's gun was on the floor. Doc takes Billy's side against his old friend Pat. In a confrontation, Pat wounds Billy by a flesh wound on the thigh, but Doc arranges things so they both are able to escape on horseback leaving the deputies behind. Seeing that Doc and Billy have become comrades as Pat and Doc were in the past, a tremendous jealousy arises in sheriff Pat, and his former friendship with Doc is over.
As Billy's wound needs tending, Doc takes him to hide in the isolated house where his putative girl friend Rio lives with her aunt. There, Doc asks Rio to take care of Billy, giving precise instructions as to how to care for the wound, while he continues running to throw Pat Garrett and his deputies off track.
Very reluctantly, pouting, Rio agrees to hide Billy and tend to his wound. After seeing Billy weak and helpless, and in her power, the sultry Rio finds herself attracted by Billy's good looks. On multiple occasions the aunt wants to turn Billy in, but Rio nixes the idea or thwarts her plans.
After having watched over Billy in bed for a time, Rio decides to kiss him. Slowly, she gets up from a chair, the camera takes the point of view of Billy's eyes, Rio approaches, flaunting her bosoms, the romantic music gets louder and louder, we see her face in slowly increasing magnification, finally mostly her lips, her lips parting in the throes of desire, just about to touch the mouth of the semi-delirious Billy [and half the men in the 1946 audience probably experience an orgasm]
A man comes to the door who seems to be an old acquaintance of the aunt, and Rio energetically blocks his entrance to maintain Billy's whereabouts secret. The scene hints that the aunt might be in the habit of entertaining gentlemen for a fee.
A few days later, Billy has the chills, and no amount of blankets will keep him warm. Rio has been warned that if this happens, he must be kept warm or he will likely die. She starts undressing, tells the aunt to leave the room and announces with assurance, "I'll warm him up." Her ministrations must be powerful, for his fever leaves him that night, and he regains consciousness the next day, plus his appetite.
While Billy heals, Doc has been playing hide and seek with sheriff Garrett and deputies in the rock canyons, with many felled by rifle fire from heights. After weeks, Doc comes back to Rio's house, planning to flee the area together with Billy and escape Garrett's jurisdiction.
New tensions develop as Doc realizes that Rio has become Billy's girl friend, and they argue again as to who owns the horse Red. Doc insists that Billy can't take both Rio and the horse from him, bringing up the old question of whether a man needs his horse more than his girl, or vice versa.
Doc offers Rio to keep the horse, and Billy chooses the horse over Rio, so either man values Rio less than the horse. With that settled, Rio remains in the house, theoretically as Doc's girl, and both men leave on horseback. However, on the first night that they camp out, Doc sneaks out with his old horse Red, leaving Billy alone.
Having thus been betrayed by Doc, Billy returns to the house to claim Rio. He finds Rio in the bedroom, glares at her, she looks back in some fear. Billy tells Rio he wants her this time to keep her eyes open and look at him in the eyes while he does it, and approaches her as the image fades to black.
With Rio under his control, Billy retraces his steps intending to leave Rio with Doc and take back his horse, but Garrett has tracked both Doc and Billy while they were distracted by the horse versus Rio disputes, and by playing one against the other he surprises, disarms and handcuffs both of them, and starts to lead them back to town.
At the first ridge, they see smoke signals indicating Indian war groups are active in any of the two directions they might take, and understand they will most likely be captured. To improve their chances, Garrett frees both men and rearms them. Warlike Indians in large numbers approach. Billy knows a trick that helps them escape: They lasso Joshua trees and drag them as they gallop, creating huge clouds of obscuring dust. During this galloping chase, we get to stare hard at Rio's bouncing cleavage for minutes, while in the background is a lot of dust, through which dozens of Indians can be glimpsed riding and hollering. In a narrow twisting canyon, when the Indian groups are totally blinded by the dust, the four manage to escape.
The four make it to an isolated house where all the plot threads are resolved after complex confrontations resulting from the ways in which Doc, Billy, and Pat have all deceived and double crossed each other and continue their manipulative tricks to the end. Pat shrieks to Doc as he realizes the other two have shoved him into irrelevance, "You're not going with him! Everything was fine between us till he came along!"
Doc Holliday feels old and sick and wants to die, but wants to die shot by Billy, whom he has sort of adopted as a worthy successor. Pat Garrett wants a bit of fame for having captured or killed Billy. Billy wants to live and be free.
Billy and Rio get to smolder intensely in one more scene of towering sexuality, as Billy needs to calm down and Rio is overwhelmed by a desire to help him achieve total relaxation.
Doc challenges Billy to a duel, expecting to lose, but Billy refuses to draw although Doc tries extreme measures to provoke him, grazing first his hand, then his ears, with bullets. In the end, Doc is shot by Pat. After Doc is buried, Pat suggests a deal to Billy, that he should take Doc's two guns in exchange for Billy's two guns, that way Pat could claim to have shot Billy, and Billy would be thought dead and could continue free with no one looking for him. He assures Billy that the guns are loaded.
Billy tries on Doc's gun belt, handles and twirls the guns, comparing them to his own, and agrees, but he senses a trick, and exchanges holsters only, not the guns. So when Pat tries to murder Billy, the gun in his hand does not fire, as the firing pins had been removed! Billy is in full control!
They set up a tomb marker over Doc's grave, reading HERE LIES WILLIAM BONNEY, 13 July 1881.
Finally, Billy starts to ride off, stops, then turns in his saddle to look back at Rio. She hesitates, unsure of what he means, then smiles and jumps on the back of Billy's horse and they ride away together.