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In 1878 John Chisum, the owner of a huge New Mexico cattle ranch, discovers that Lawrence Murphy, a corrupt businessman, is trying to gain control of the surrounding land by illegally foreclosing mortgages.  When Chisum comes upon some of Murphy's men rustling cattle, he enlists the aid of J.H. Tunstall, his English neighbor, and the notorious Billy "The Kid" Bonney to gun the cowboys down.

Stranger Pat Garrett arrives and informs Chisum of Murphy's growing power and particularly his influence on Sheriff Brady, who was appointed by Murphy.  When the ranchers attempt to set up a general store of their own and Murphy's men interfere, Tunstall decides to report his actions to the governor; on his way, however, Tunstall is killed by Sheriff Brady.  Billy, enraged by the murder of his friend, shoots Brady and his deputies in revenge.

Chisum's niece Sally, who had been attracted to Billy, realizes the extent of his violent character and turns her affection to Pat Garrett.  Murphy then uses the killings to persuade the governor to send bounty hunter Dan Nodeen to apprehend Billy and his gang.  Murphy Joins Nodeen in the fierce gunfight against Billy; Chisum stampedes his cattle through town and in the resulting confusion, Billy chases Nodeen out of town and Chisum kills Murphy.  The town is left in ruins, but Garrett is appointed sheriff, and Chisum is once again in control of his cattle empire.