After a recent outbreak of violence between the Arizona National Guard and students at the progressive Freedom School, a reservation learning center, the head of the school, Jean Roberts, meets with reporters at the hospital where she is recovering from her injuries. Revealing that three students died and two remain in critical condition, Jean compares the shootings to those at Kent State and other university campuses and wonders if the center can survive. Later, a female reporter asks Jean if the trouble at the school began four-and-a-half years earlier with the trial of Billy Jack, a half-Native American, Vietnam veteran and self-appointed protector of Jean and the students. Jean recalls portions of the trial and its aftermath: On trial for the murder of a man who abused his daughter and of the son of the town’s wealthiest citizen, Stuart Posner, who had raped Jean, Billy describes his personal philosophy that a man can only maintain his integrity by following his conscious. When questioned about his seeming disdain for authority, Billy reveals that his Vietnam experience and President Nixon’s lie about investigating the massacre at My Lai made him deeply cynical about government and those in power. After Billy is sentenced to five-to-fifteen years for involuntary manslaughter, the students are determined to build up the school he fought for and, over the next several months, renovate a large, abandoned military academy. There they continue Jean’s methods of using meditation and body awareness exercises, along with arts and crafts to augment traditional curriculum. With the larger premises they also start a radio-television station and a newspaper that they use to expose local and statewide government corruption. After a student expose suggests that Posner receives government favoritism because of his large political donations, Jean suspects that the school is bugged by the FBI after they investigate the school. Meanwhile, Billy refuses to see visitors while in prison, but writes to Jean every day. After nearly five years, Billy is released on the day the school hosts the first international seminar on child abuse. One of the school’s cherished students, Carol, has taken on the care of a young boy, Danny, who lost an arm from abuse and after being passed along to a multitude of foster homes, is considered unreachable. After receiving a warm welcome at the new school, Billy is surprised to discover that Jean and many students have undertaken Hapkido, the Korean form of karate, and befriends the master Bong Soo Han. Some days later, when several native students do not report back from a ski trip in the nearby mountains, Blue Elk, a tribal representative, declares that the white law will not go out of their way to help them. Later, Billy joins Jean and a helicopter rescue team, who locate the students after they have strayed onto Posner’s private property. When one of the students, who is in critical condition is transported to the town hospital, only the intervention of Doc, a physician friendly to Jean and the students, prevents the boy from being sent untreated to a distant native hospital. Later, at the trial of student Little Bear, who is charged with trespassing, Native American activist Patsy Littlejohn declares that the Indians do not recognize the jurisdiction or validity of the court for members of the reservation, but Little Bear is sentenced to ten days in jail and one year probation. Over the next several weeks, Billy notices that tensions between the townspeople, the natives and the students escalate, and is compelled to intervene when the police goad students in town. Soon after, at a tribal meeting to discuss a pending Congressional bill on native self-determination, Patsy and Blue Elk clash over how best to represent the reservation. When the bill is voted down and tribal land leases are terminated, a confrontation arises between the natives and a group of white townspeople, including Posner, over hunting on native land. When the group, who are partying after killing several deer, are challenged on their right to hunt on Native land by an armed group of natives led by Blue Elk, a wealthy businessman insists that he has purchased the land in question. After Billy gets the man to admit that he was a contributor to a secret fund supporting the state’s governor and notices that the lieutenant governor is in the party, he advises Blue Elk to withdraw his threat to sue the group. Blue Elk agrees with a stipulation that he record the hunt and Billy photographs the group and later publishes the photos of them with deer carcasses in the Freedom School’s paper. While Billy goes on a retreat to undergo a search for spiritual guidance and knowledge with a village elder, at the school, Carol and Jean must battle to keep Danny from being taken by State authorities who question the school’s methods and effectiveness. Later, after the students discover proof that the school is bugged, the radio transmitter is blown up while the school radio is conducting an interview with the governor. The governor responds by placing the town under martial law, relieving the anxious townspeople but offending the students, some of whom advocate responding with violence. Frustrated, several students go in search of Billy for advice, but are turned away by native sentries who explain that Billy is communing with his spirit guide. After Billy goes into the Cave of the Dead and learns that he must control his instinct to use violence, he returns to the valley where he tells the students that violence will only provoke the law to come down hard on the school. Hoping to diffuse rising tensions in town, the students decide to meet the National Guard with a welcome parade and bevy of games and competitions open to everyone. That night, determined to incite the students, a townsman, Jason, leads several other men in tormenting Carol and others when their school bus stalls on a dark, back road until Billy comes to their rescue. A few days later, the night before an Indian Rights Seminar, while Carol shows Jean her recent success with Danny, several townsmen attack and drown Little Bear, making it appear to be an accident. After the seminar, Blue Elk is lured by Jason and several of his friends into a possible mediation of the land situation, but instead the men beat him when he refuses to make a deal with them. They then drag Blue Elk into a party attended by affluent townspeople, who make no attempt to help Blue Elk when he is further tortured. Having heard about the attack, Billy and Han sneak into the building, but Jean intercepts them and demands that they refrain from violence. Billy agrees, then asks the party-goers if he may take the unconscious Blue Elk for help, but Posner refuses. Despite Jean’s plea, Billy and Han then attack Posner’s men and knock several unconscious before Posner draws a pistol and shoots Han. Infuriated, Billy attacks and kills Posner with one blow. Later, as the wounded Han is taken away, Sheriff Cole, a long-time friend and supporter of Jean and the school, tells Billy he must arrest him, but Billy fears he will be attacked once he is in custody. Upon hearing of the governor’s order to arrest Billy, the students riot at the school and help Billy evade arrest by hiding him. The next day as Billy and Jean watch from the school roof, the National Guard move onto the property, refusing to leave until Billy is under arrest. Fearful of violence against the students, Billy voluntarily surrenders to Cole with the promise that the Guard will then withdraw. Told he must go with State troopers instead of Cole, Billy agrees, but as he is driven away, Jean and the students are shocked when another Guard unit arrives. Under orders, the troopers drive to an isolated spot where they give Billy a pistol and encourage him to flee. The plan backfires when Billy escapes in a volley of shots from the troopers. Wounded, Billy seeks help from Blue Elk and the tribe’s medicine men. The next day, because tension at the Freedom School is unbearable, Jean demands the angry students consider that any violent action could destroy the good the school has done, including helping those like Danny. At dusk, as the Guard receives word that radicals from all over the state are arriving at the school, officers tell their men that snipers have been spotted on the school rooftops. Just as a student throws a rock that strikes a soldier, elsewhere, another soldier fires a warning shot. A plainclothes policeman, who believes the snipers have taken action, then opens fire, prompting a wild volley of shots into the crowd of students. In the frenzy, Danny is killed, while Carol, Jean and several others are wounded. In the present, a teary Jean laments that the townspeople supported the Guard's action and blamed the students. After Billy's spirit guide tells him that he still must learn to control his instincts, a recovering Billy encourages Jean not to give up on the school or the students. Jean reluctantly joins Billy and the recovering Carol at the Freedom School where they receive a heartfelt welcome and thanks as well as the students' vow to carry on with the Freedom School.