In 1280, King Edward "Longshanks" invades and conquers Scotland following the death of Alexander III of Scotland, who left no heir to the throne. Young William Wallace witnesses Longshanks' treachery, survives the deaths of his father and brother, and is taken abroad on a pilgrimage throughout Europe by his paternal Uncle Argyle, where he is educated. Years later, Longshanks grants his noblemen land and privileges in Scotland, including Prima Nocte. Meanwhile, a grown Wallace returns to Scotland and falls in love with his childhood friend Murron MacClannough, and the two marry in secret. Wallace rescues Murron from being raped by English soldiers, but as she fights off their second attempt, Murron is captured and publicly executed. In retribution, Wallace leads his clan to slaughter the English garrison in his hometown and send the occupying garrison at Lanark back to England.
Longshanks orders his son Prince Edward to stop Wallace by any means necessary. Wallace rebels against the English, and as his legend spreads, hundreds of Scots from the surrounding clans join him. Wallace leads his army to victory at the Battle of Stirling Bridge and then destroys the city of York, killing Longshanks' nephew and sending his severed head to the king. Wallace seeks the assistance of Robert the Bruce, the son of nobleman Robert the Elder and a contender for the Scottish crown. Robert is dominated by his father, who wishes to secure the throne for his son by submitting to the English. Worried by the threat of the rebellion, Longshanks sends his son's wife Isabella of France to try to negotiate with Wallace as a distraction for the landing of another invasion force in Scotland.
After meeting him in person, Isabella becomes enamored of Wallace. Warned of the coming invasion by Isabella, Wallace implores the Scottish nobility to take immediate action to counter the threat and take back the country. Leading the English army himself, Longshanks confronts the Scots at Falkirk where noblemen Lochlan and Mornay, having been bribed by Longshanks, betray Wallace, causing the Scots to lose the battle. As Wallace charges toward the departing Longshanks on horseback, he is intercepted by one of the king's lancers, who turns out to be Robert the Bruce, but filled with remorse, Bruce gets Wallace to safety before the English can capture him. Wallace kills Lochlan and Mornay for their betrayal, and wages a guerrilla war against the English for the next seven years, assisted by Isabella, with whom he eventually has an affair. Robert sets up a meeting with Wallace in Edinburgh, but Robert's father has conspired with other nobles to capture and hand over Wallace to the English. Learning of his treachery, Robert disowns his father. Isabella exacts revenge on the now terminally ill Longshanks by telling him that his bloodline will be destroyed upon his death as she is now pregnant with Wallace's child.
In London, Wallace is brought before an English magistrate, tried for high treason, and condemned to public torture and beheading. Even whilst being hanged, drawn and quartered, Wallace refuses to submit to the king. As cries for mercy come from the watching crowd deeply moved by the Scotsman's valor, the magistrate offers him one final chance, asking him only to utter the word, "Mercy", and be granted a quick death. Wallace instead shouts, "Freedom!", and the judge orders his death. Moments before being decapitated, Wallace sees a vision of Murron in the crowd, smiling at him.
In 1314, Robert, now Scotland's king, leads a Scottish army before a ceremonial line of English troops on the fields of Bannockburn, where he is to formally accept English rule. As he begins to ride toward the English, he stops and invokes Wallace's memory, imploring his men to fight with him as they did with Wallace. Robert then leads his army into battle against the stunned English, winning the Scots their freedom.