County Cork, Ireland, 1920. Damien O'Donovan is about to leave his native village to practice medicine in a London hospital. Meanwhile, his brother Teddy commands the local flying column of the Irish Republican Army. After a hurling match, Damien witnesses the summary execution of his friend Micheál Ó Súilleabháin, by British Black and Tans, for refusing to say his name in English and punching an officer. Although shaken, Damien rebuffs his friends' entreaties to stay in Ireland and join the IRA, saying that the war is unwinnable. As he is leaving town, Damien witnesses the British Army vainly trying to intimidate a railway personnel for refusing to permit the troops to board. In response, Damien decides to stay and is sworn into Teddy's IRA brigade.
After drilling in the mountains, the column raids the village's Royal Irish Constabulary barracks to acquire revolvers, then uses them to assassinate four Auxiliaries. In the aftermath, Anglo-Irish landowner Sir John Hamilton coerces one of his servants, IRA member Chris Reilly, into passing information to the British Army's Intelligence Corps. As a result, the entire brigade is arrested. In their cell, Damien meets the train driver, Dan, a union official who shares Damien's socialist views.
Meanwhile, British officers interrogate Teddy, pulling out his fingernails when he refuses to give them the names of IRA members. Johnny Gogan, a British soldier of Irish descent, helps the prisoners escape, but three are left behind. After the actions of Sir John and Chris are revealed to the IRA's intelligence network, both are taken hostage. As Teddy is still recovering, Damien is temporarily placed in command. News arrives that the three remaining IRA prisoners have been tortured and shot. Simultaneously, the brigade receives orders to "execute the spies".
Despite the fact that Chris is a lifelong friend, Damien shoots both him and Sir John. Later, the IRA ambushes and wipes out a convoy of the Auxiliary Division, and in retaliation another detachment of Auxiliaries loots and burns the farmhouse of Damien's sweetheart, Cumann na mBan member Sinéad Sullivan. Sinéad is held at gunpoint while her head is roughly shorn, her scalp being wounded in the process. Later, as Damien treats her, a messenger arrives with news of a formal ceasefire between Britain and the IRA.
After the Anglo-Irish Treaty is signed, the brigade learns that a partitioned Ireland will only be granted Dominion status within the British Empire. As a result, the brigade divides over accepting the terms of the Treaty. Teddy and his allies argue that accepting the Treaty will bring peace now while further gains can be made later. Others oppose the Treaty, proposing to continue fighting until a united Irish Republic can be obtained. Dan and Damien further demand the collectivisation of industry and agriculture. Any other course, declares Dan, will change only "the accents of the powerful and the colour of the flag".
Soon the Irish Free State replaces British rule, and Teddy and his allies begin patrolling in National Army uniforms. Meanwhile, Damien and his allies join the Anti-Treaty IRA. When the Battle of Dublin launches the Irish Civil War, the Anti-Treaty column commences guerrilla warfare against Free State forces. As the violence escalates, Teddy expresses fear that the British will invade if the republicans gain the upper hand. His position is: "They take one out, we take one back. To hell with the courts."
Soon after, Dan is killed and Damien is captured during a raid for arms on an Irish Army barracks commanded by Teddy. Sentenced to execution, Damien is held in the same cell where the British Army imprisoned them earlier. Desperate to avoid executing his brother, Teddy pleads with Damien to reveal where the Anti-Treaty IRA is hiding the stolen rifles. In return, Teddy offers Damien full amnesty, a life with Sinéad, and the vision of an Ireland where Pro- and Anti-Treaty Irishmen can raise families side by side. Insulted, Damien responds by saying that he will never "sell out" the Republic the way Chris Reilly did and Teddy leaves the cell in tears. Damien writes a goodbye letter to Sinéad, expressing his love for her, and quoting Dan's words: "It's easy to know what you're against, quite another to know what you're for". But he says that he knows what he stands for and is not afraid to die for it and tells Sinéad to look after Teddy. At dawn, Damien dies before a firing squad commanded by a heartbroken yet obstinate Teddy. Teddy delivers Damien's letter to Sinéad who is distraught and heartbroken. She attacks Teddy and orders him to leave her land.
