Two friends, Thelma Dickinson and Louise Sawyer, set out for a weekend vacation at a fishing cabin in the mountains to take a break from their dreary lives in Arkansas. Thelma, a housewife, is married to disrespectful and controlling carpet salesman Darryl, while sharp-tongued Louise works as a waitress in a diner and is dating easygoing musician Jimmy, who is on the road most of the time.
On the way, they stop at a roadhouse bar, where Thelma dances with a flirtatious stranger, Harlan Puckett. He takes her to the parking lot and tries to rape her until Louise intervenes and threatens to shoot him. As the women walk away, Harlan yells he should've continued the rape, causing Louise to fatally shoot him in a fit of rage. The two women immediately drive off.
At a motel they discuss how to handle the situation. Thelma wants to go to the police, but Louise fears that no one will believe a claim of attempted rape as Thelma was drinking and dancing with Harlan, in addition to having no evidence of the rape; they would be facing a murder charge. They decide to flee to Mexico, but Louise demands they travel there without going through Texas, as something happened to her there several years earlier which she refuses to reveal.
Heading west, they come across an attractive young drifter, J.D., to whom Thelma takes a liking. Louise contacts Jimmy, asking him to wire her life savings to her. He surprises her by delivering the money in person, and they spend the night together. Jimmy proposes to Louise, but she refuses. At a motel, J.D. talks his way into Thelma's room and they sleep together. She learns he is a convicted armed-robber who has violated the terms of his parole. The following morning, the women discover J.D. has stolen Louise's savings and fled. Louise is distraught, so a guilty Thelma takes charge and later robs a nearby convenience store using tactics she learned from J.D.
Meanwhile, the FBI closes in on the duo after witnesses at the bar identify Louise's 1966 Ford Thunderbird convertible. Led by Arkansas State Police Investigator Hal Slocumb, the police tap into the phone line at Darryl's house. He sympathizes with the pair's situation, and understands why they did not report Harlan's killing. During a few brief phone conversations with Louise, Hal expresses his concerns and tells her he knows what happened to her in Texas, but is unsuccessful in persuading her to surrender.
Thelma tells Louise she will not go back to Darryl and asks her friend if she intends to cut a deal with police so she can return to Jimmy. Louise rejects the notion of betraying her friend and promises Thelma they will keep going together. While back on the road, Thelma recalls the incident with Harlan and tries to ask Louise if something similar happened to her in Texas. Louise responds angrily and tells Thelma to never bring it up again.
Later, they are pulled over by a New Mexico state trooper for speeding. Knowing he will soon discover they are wanted for murder and armed robbery, Thelma holds him at gunpoint and locks him in the trunk of his police car. Driving further west, they encounter a foul-mouthed truck driver who repeatedly makes obscene gestures at them. They pull over and demand an apology from him; when he refuses, they fire at his fuel tanker, causing it to explode. The women leave him stranded in the desert with the wreckage.
Thelma and Louise are finally cornered by the authorities only a hundred yards from the edge of the Grand Canyon. Hal arrives on the scene, but the women refuse his last attempt to talk them into surrendering. Rather than be captured, Thelma proposes that they "keep going". Both kiss and hold hands as Louise steps on the gas and they accelerate over the cliff to their certain deaths.
