In 1974, Karen Silkwood (Meryl Streep) and co-workers Drew Stephens (Kurt Russell) and Dolly Pelliker (Cher) arrive for work at the Kerr McGee Cimarron nuclear facility near Cimarron City, Oklahoma. Karen works in Dry Processing, which involves processing plutonium and uranium oxide into nuclear fuel pellets. The plant manager conducts new trainees through the plant, and when asked about the effects of radiation exposure, answers that radiation is like sunburn, the kind of thing that cannot hurt you unless you are careless with it. When the lunch bell rings, Karen removes her protective gloves and attempts to rush out of her work area, but is called back by her fellow workers for not monitoring herself. She passes her bare hands across a radiation detector before leaving.
In the lunchroom, Karen hears about a truck that became contaminated with radiation as the result of a container leak. She learns that her boyfriend, Drew (Craig T. Nelson), will have to work an hour late, and she cannot find the foreman Mace Hurley (Bruce McGill) to ask permission to have Saturday and Sunday off to see her children. She notices Winston, a new worker in X-Ray Metalography. Drew asks if she likes him, but Karen responds, "As a matter of fact, he's the type I hate." When she catches up with Hurley, Karen is told that the plant operates 24 hours a day, and it is not possible to give her time off.
As Karen tries to get one of her reluctant co-workers to take her weekend shifts, an alarm sounds. They believe it to be a test, but remark that, although test alarms are sounded regularly, they never actually evacuate the building, probably because it would shut down production. Gilda Schultz (E. Katherine Kerr) finally agrees to take Karen's weekend shifts. That night, as Karen goes to her car, she hears a noise and goes to investigate. She sees a truck being cut apart by security guards, but when she asks what is going on, she is told to leave.
On Saturday morning, Karen, Drew and Dolly drive to Texas to take her three kids to the beach. However, Karen's ex-husband, Pete Dawson (Ray Baker), has the weekend off himself, and tells Karen she should have talked to him as he has made his own weekend plans. He does allow Karen to take the children to a restaurant for a brief visit. On the way back to Oklahoma, Dolly asks how long Karen was married to Pete. Karen confesses that although they went to Louisiana, where they believed they could be married underage, they could not, and never actually were legally married. They were formally divorced, however, because their union was recognized as a common law marriage. Karen laments that she had the children in the car, and could have driven them to Oklahoma, but did not.
Arriving at work on Monday, Karen is approached by a friend named Joe (Will Patton), who mentions he helped bury a contaminated truck Friday night. As she gets ready in the changing room, Karen learns that Gilda did not work her shifts, but Gilda informs her that the plant was shut down because of a contamination in their section right after Karen left. Gilda also mentions that the company believes Karen was responsible for the contamination in order to get the weekend off. She enters her work area wearing a full hazmat suit, and finds her co-workers similarly clad as the walls of the room are being scrubbed down by a cleanup crew. She complains about being unfairly blamed for the contamination, but Quincy Bissell (Henderson Forsythe), the union shop steward, tells her the company has to blame somebody or risk accountability.
Back in the plant, Thelma Rice (Sudie Bond), an older worker and friend of Karen's, is "cooked" in a radiation accident. Thelma is taken to the decontamination room where she is showered down. Afraid that Thelma will get cancer as a result of her exposure, Karen urges the woman to listen to the doctor, who informs her that she only had surface exposure, and is in no danger after being scrubbed clean. Later, at home, Karen learns from Drew that Thelma only received 24 dpm's (disintegrations per minute) of radiation, which he dismisses as "not super bad." He asks if Karen is just waking up to the potential danger of working with nuclear materials after almost two years.
The next day, as she talks with her co-workers, Karen realizes that the doctor never gave Thelma a nasal smear, so he does not really know if she suffered any internal contamination. She urges Thelma to get the procedure. Later, Mace Hurley interrupts a birthday celebration for Gilda Schultz, and tells the Dry Processing employees to get back on the job. If they do not meet their contract goals, they will all be out of work. Karen attempts to pick up some birthday cake that has fallen onto the floor, but Hurley tells her to clean it up after her shift. As Karen leaves the Dry Processing room after vacuuming up the cake, she sets off the contamination alarm. She is scrubbed down, and told by the plant doctor to bring in urine samples every week.
Later, Karen looks through a book supplied by the union, but which she is only now reading. She tells Dolly that all the information about "acceptable levels" of radiation is false, and that exposure to plutonium gives you cancer. Still later, Drew brings home news that Karen has been transferred out of Dry Processing into the Metalography department. She is upset, because the transfer means she will have to work three months before she can again qualify for overtime work. On her new assignment, Winston explains her duties, which include making photographic records of fuel rod samples. Karen catches Winston doctoring the photographic negatives to cover up imperfections in the fuel rods.
At a union meeting, shop steward Quincy informs the workers that Kerr McGee has obtained enough signatures to hold a desertification vote. When he seeks volunteers to help him reach out to union members, Karen volunteers. Drew does not believe Karen has the political skills to be an effective negotiator, but she believes she can sit across the table from Mace Hurley as an equal. In time, Dolly begins dating a beautician named Angela (Diana Scarwid). Drew becomes upset when Angela moves in to the house Dolly and Karen share, and Karen spends all her time on the phone with union matters. Karen suggests to Quincy that they involve the national union in their cause, and they land a meeting in Washington, D.C. with the national union and the Atomic Energy Commission (AEC). The president of the national union informs Quincy and Karen that they can only win the desertification election based on health and safety issues, and promises to send doctors to talk with the Cimarron workers. The union president leaves to catch a plane, but Karen follows and tells him about the doctoring of the cross-section photographs of fuel rods intended for the Hanford, Washington, Breeder Reactor. The president asks for proof of her claims.
Back in Oklahoma, Drew is upset when Quincy shows slides of the Washington, D.C. trip, and in the photos Karen appears to be flirting with attorney Paul Stone. On their way home, Drew asks if the company was aware of Karen's trip to Washington, and that she is spying for the union. He informs Karen that he quit working for Kerr McGee, and moves out of the house.
In the Metalography department, Karen goes through Winston's desk drawer looking for doctored photographic negatives. Winston catches her, but she convinces him she was only using the drawer to store allergy medications not allowed in the plant. After doctors talk to the Kerr McGee workers, Winston confronts union lawyer Paul Stone (Ron Silver), questioning why the union has only come in now that there is a pending desertification vote. He believes the company is looking out for its employees, and that if issues are raised, Kerr McGee will shut down the plant, putting the locals out of work while Stone will return to his job in Washington, D.C. Paul Stone does return to Washington, and he falls out of communication with Karen. She calls to tell him the union won the election, 80 to 61, but only reaches his answering machine.
Some time later, Angela returns to her husband, leaving Dolly feeling rejected, just as Karen feels rejected by Paul Stone. At the plant, Gilda Schultz mentions that her husband has been working late flushing out pipes because the plant has come up more than a kilo short on plutonium. When Karen takes notes, her co-workers leave the room, concerned that her union activities will threaten their jobs. Karen finally speaks with Paul about several incidents at the plant, but he is more concerned with evidence of the doctored photographic negatives. Karen is shunned by management as well as her fellow employees. When she goes to Dry Processing in an attempt to speak with Gilda, she is rebuffed, and as she leaves the area and flashes her hand in front of the radiation monitor, she again sets off the alarm. Although the plant doctor informs her that the exposure level was acceptable, he orders her to start bringing in her urine samples on a daily basis.
In declining health, Karen hits a deer as she drives home, and asks a passerby to call Drew. Soon, when she comes into work, she sets off a radiation alarm as she enters the plant. A team is sent to her house with a Geiger counter, finds the building contaminated, and takes everything out of the house. Mace Hurley suggests that Karen contaminated her own house, believing she would do anything to hurt the company. In turn, Karen believes her urine samples have been tampered with. She is told her latest nasal smear has a reading of 45,000 dpm. Hurley offers to get Karen a place to stay and help her with money, but first she must make a statement in her own words about what happened. She refuses, and drives away.
Drew returns to the stripped house to reminisce about his days there with Karen, and takes the spare key left above the door frame as a souvenir. Winston drives up and asks what Drew is doing there. Unable to contain his rage, Drew hits Winston, knocking him to the ground. He returns to his new home and finds Karen there. She tells him the company has contaminated her and is trying to kill her. Drew makes plans to take Karen to Los Alamos, New Mexico, where doctors are well versed in the effects of radiation. There, doctors inform Drew and Dolly that, although they have been exposed through contact with Karen, their radiation is within safe levels. Karen, however, is told that they have discovered americium, an element released when plutonium disintegrates. Based on the level of americium, they have determined that she has a level of six nano curies in her body. The maximum body burden for occupational exposure is 40 nano curies; however, the tests she has undergone may be off by as much as 300 percent.
Afterward, Karen telephones Paul Stone, asking him to come to Oklahoma City with a New York Times reporter. Back home, Drew suggests they move to New Mexico and have babies, but Karen fears they would have developmental defects. The next morning Karen sets out for a union meeting and asks Drew to pick up Paul Stone and the New York Times reporter at the airport. At night, after she leaves a cafe, a car follows Karen as she drives home. The high-beam glare of headlights from the pursing car in her rear view mirror blinds her.
Later, Karen's car is found crashed by the side of the road. Her tombstone reads: Karen Gay Silkwood; Feb. 19, 1946 - Nov. 13, 1974; Rest In Peace.
The film concludes with a title that reads: "The precise circumstances of Karen's death are unknown. It is also not known whether she had any documents with her. None were found. An autopsy revealed a high level of the tranquilizer Methaqualone and some alcohol in her bloodstream. Oklahoma police ruled her death a single car accident. A year later the plant shut down for good."