Ponyboy Curtis, a member of a gang called the “Greasers”, is leaving a movie theater when groups of “Socs”, the Greasers’ rival gang, jump him. His older brothers—Darrel and Sodapop—and several members of their gang rescue him. The next night, Ponyboy and his Greaser friends Dallas and Johnny meet Socs, Cherry Valance and Marcia, at a drive-in movie theatre. Ponyboy realizes that Cherry is nothing like the Socs he has met before. Afterward, Two-Bit Matthews, another gang member, Ponyboy, and Johnny walk Cherry and Marcia home. Socs Bob Sheldon and Randy Adderson see them and think the boys are trying to pick up their girlfriends. Cherry prevents a fight and the girls leave with Bob and Randy willingly. When Ponyboy comes home at two in the morning Darry becomes angry and in a fit of rage starts to yell at both Soda and Pony. Ponyboy runs away after Darry strikes him and meets up with Johnny to run away. Ponyboy calms down and wonders if running away would be a good idea. The boys wander into a park in the neighborhood. Bob, Randy, and three other drunken Socs confront them. After exchanges of derogatory remarks, Ponyboy spits at them. The Socs attempt to drown Ponyboy in a fountain. Johnny, anxious and terrified, stabs Bob, accidentally causing his death. Ponyboy and Johnny, frightful and unaware of what to do, seek Dallas’ help. Dally gives them money and a loaded gun and tells them to hide in an abandoned church in Windrixville. During their stay, Pony cuts and dyes his hair as a disguise and reads Gone with the Wind to Johnny. He also recites the poem "Nothing Gold Can Stay" by Robert Frost.
When Dallas comes to check on them, he reveals that the tension between the Greasers and Socs have increased since Bob's death. Johnny decides to turn himself in and Dally agrees to take the boys back home. As they attempt to leave, they notice the church has caught fire and several schoolchildren are trapped inside. The boys run inside the burning church to save them, but Ponyboy is rendered unconscious by the fumes. At the hospital he discovers that he and Dally are not badly injured, but a piece of the church roof fell on Johnny and broke his back. Sodapop and Darry come to the hospital; Darry breaks down and cries. Ponyboy then realizes that Darry cares about him, and is only hard on Ponyboy because he wants him to have a good future. The following morning the newspapers declare Pony and Johnny heroes, but Johnny would be charged with manslaughter for Bob’s death. Two-Bit tells them that the consistent rivalry between the adversaries are to be settled in a rumble. Ponyboy and Two-bit run into Randy who tells them he will not participate in the fight.
Later, they visit Johnny at the hospital who is in critical condition. On their way home, Pony spots Cherry and they talk. Cherry says she is unwilling to visit Johnny in the hospital because he killed her boyfriend. Pony calls her a traitor, but after explaining herself, they come to mutually good terms. Dally shows up just in time for the rumble after escaping the hospital. The Greasers win the fight. Afterward, Pony and Dallly hurry back to see Johnny. He dies while they’re in the hospital and a maniacal Dally runs out of the room. Pony returns home that night feeling confused and disoriented. Dally calls the house to say that he robbed a store and is running from the police. The Greasers find him, but see that Dally is pointing an unloaded gun at the police. They shoot Dally and he dies instantly. Ponyboy becomes overwhelmed and faints. He regains consciousness and is sick in bed for several days due to a concussion. When the hearing finally approaches, the judge is generous and Pony is free from responsibility for Bob’s death. Pony will be allowed to remain at home with Darry and Soda.
When Ponyboy goes back to school, his grades drop. Although he is failing English, his teacher, Mr. Syme, says he will pass him if he writes a decent theme. In the copy of Gone with the Wind that Johnny gave him before dying, Ponyboy finds a note from Johnny describing how he will die proudly after saving the kids from the fire. Johnny also urges Ponyboy to "stay gold". Ponyboy decides to write his English assignment about the recent events, and begins his essay with the opening line of the novel: "When I stepped out into the bright sunlight from the darkness of the movie house, I had only two things on my mind: Paul Newman and a ride home..."