In 1898, Daniel Plainview, a prospector in New Mexico, mines a potentially precious ore vein from a pit mine hole. In the process of dynamiting the lode, he falls from a broken rung of the tunnel ladder and breaks his leg. He saves a silver sample, climbs out of the mine, and drags himself to the nearest assay office to record his and gets a Silver and Gold certificate claim. In 1902, he discovers oil near Los Angeles, California and establishes a small drilling company. Following the death of a worker in an accident, Daniel adopts the man's orphaned son. The boy, named H. W., becomes his nominal "business partner", allowing Daniel to paint himself to potential investors as "a family man".
Nine years later in 1911, Daniel is approached by Paul Sunday, who tells him of an oil deposit under his family's property in Little Boston, California. Daniel attempts to buy the farm at a bargain price but Paul's twin brother Eli, wise to Daniel's plan, holds out for $5,000 and states that it is for a local church of which he is the pastor. An agreement is made and Daniel goes on to acquire all the available land in the area, except for one holdout: William Bandy. Oil production begins, but an on-site accident kills a worker and a gas blowout robs H. W. of his hearing. Eli blames the disasters on the well not being properly blessed. When he demands his family's as yet unpaid $5,000, Daniel beats and humiliates him. Eli berates and attacks his father at the dinner table for trusting Daniel, as well as blaming his brother Paul for the family's plight.
A stranger seeking work arrives on Daniel's doorstep, claiming to be his half-brother, Henry. Daniel hires Henry to work for him, and the two grow closer. H. W. sets fire to their house, intending for it to kill Henry. Angered at his son's behavior, Daniel sends him away to a school for the deaf in San Francisco, California. A representative from Standard Oil offers to buy out Daniel's local interests, but Daniel elects to strike a deal with Union Oil and construct a pipeline to the California coast, though the Bandy ranch remains an impediment.
While reminiscing about their childhood, Daniel becomes suspicious of Henry and one night holds him at gunpoint. Henry confesses that he was actually a friend of the real Henry, who died from tuberculosis. In a fit of rage, Daniel murders the impostor and buries his body. The next morning, Daniel is awakened by Mr. Bandy, who knows of the previous night's events and wants Daniel to repent by joining Eli's church. Eli humiliates Daniel there, coercing him into acknowledging that he is a bad father as part of his baptism. When the ordeal is over, Daniel feels that it was worth the embarrassment. Some time later, as the pipeline is well under way, H. W. returns and reunites with Daniel, while Eli leaves town to perform missionary work.
In 1927, a much older H. W. marries Mary Sunday, his childhood sweetheart and the sister of Eli and Paul. Daniel, now extremely wealthy but a raging alcoholic, lives as a recluse in a large mansion. Through an interpreter, H. W. asks Daniel to dissolve their partnership so that he can establish his own oil company in Mexico. An offended Daniel mocks H. W.'s deafness and reveals his true origins as an orphan. H. W. leaves, but not before telling Daniel, "I thank God I have none of you in me."
Soon after, Eli pays a visit, finding a drunken Daniel passed out in the mansion's bowling alley. Eli has made a living as a radio preacher and announces that Mr. Bandy has died, then offers to broker a deal on his land. Daniel agrees, but only on the condition that Eli loudly and repeatedly admit that he is "a false prophet and that God is a superstition." Eli does so reluctantly, and Daniel reveals that the property is now worthless because he has already drained its oil through surrounding wells. Shaken and desperate, Eli confesses to be in dire financial straits, and Daniel taunts him by mentioning his brother Paul, who, Daniel claims, has his own oil company and is comparatively more successful. Daniel chases Eli down and then kills him by smashing his head in with a bowling pin. When Daniel's butler comes down to check on him, Daniel says casually, "I'm finished."