Ponyboy, a member of the Greasers gang, is leaving a movie theater when a group of Socs jumps him. His older brothers Darrel and Sodapop and several members of their gang, rescue him. The next night, Ponyboy and his friends Dallas and Johnny meet Cherry Valance and Marcia at a drive-in movie theatre. Ponyboy realizes that Cherry is nothing like the Socs he has met before. The Greasers walk Cherry and Marcia home, and Socs Bob Sheldon and Randy Adderson see them and think the boys are trying to pick up their girlfriends. Cherry and Marcia prevent a fight by leaving with Bob and Randy willingly. When Ponyboy comes home very late, Darry gets angry and hits him. Ponyboy runs away and meets up with Johnny. As they wander around the neighborhood, Bob, Randy, and three other drunk Socs confront them. After the Socs nearly drown Ponyboy in a fountain, a terrified Johnny stabs Bob, accidentally killing him. Ponyboy and Johnny find Dallas, who gives them money and a loaded gun and tells them to hide in an abandoned church. They stay there for a few days, during which time Ponyboy reads Gone with the Wind to Johnny and recites the poem "Nothing Gold Can Stay" by Robert Frost.
When Dallas comes to get them, he reveals that the fights between the rival groups have exploded in intensity since Bob's death. Johnny decides to turn himself in, but the boys then notice that the church has caught on fire and several children are trapped inside. When Johnny and Ponyboy rush to rescue them, burning timber falls on Johnny, breaking his back. Dallas rescues Johnny. Ponyboy is relatively unscathed and spends a short time in the hospital. When his brothers arrive to see him, 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.
Another of the gang, Two-Bit, informs Ponyboy that he and Johnny have been declared heroes for rescuing the kids, but Johnny will be charged with manslaughter for Bob's death. He also says that the Greasers and Socs have agreed to settle their turf war with a major rumble. The Greasers win the fight. After the rumble, Dally and Ponyboy visit Johnny and see him die. An overcome Dally rushes out of the hospital and robs a store. When he points his empty gun at the police, they shoot and kill him. Ponyboy faints and stays sick and delirious for nearly a week. While recovering, he tries to convince himself that Johnny is not dead and that he is the one who killed Bob.
When Ponyboy goes back to school, his grades drop. Although he is failing English, his teacher 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..."
