Santer [Mario Adorf] and his gang chase Apache Gold, trespass on Apache land, and intercept a courier named Black Eagle. The young warrior is killed as the outlaws press for information.
Meanwhile, Old Shatterhand [Lex Barker] is a young surveyor who discovers that the Great Western Railway is breaching contracts by taking a shortcut through Apache land. He is told that geological complications would leave the company with no other option, but this is framed as a pretext to save money, even at the cost of lives.
Winnetou [Pierre Brice] observes how the railway is built into the land of his tribe. On his way back to his village he comes across Black Eagle’s corpse. He brings Black Eagle to his family and reports to his father Chief Intschu-tschuna [Milivoje 'Mavid' Popović].
Chief Intschu-tschuna is deeply worried that more villains like Santer will get to the Apache land and jeopardize his people if the Great Western Railway continues.
A missionary called Klekih-petra [Hrvoje Švob] begs him not to start a war. He talks the aristocratic chief and his son Winnetou into setting up a meeting with a deputation from the railway. Old Shatterhand is chosen to convince the Indians that the contracts would be honored after all.
But Santer doesn’t let go of his ambitions. He strives to tarnish Winnetou’s reputation so that the U.S. Army will come and drive the people off their land, clearing the way for his own ambitions.
Santer persuades the Kiowa chief to attack the meeting. Klekih-petra is killed and Winnetou is captured by his enemies.
Old Shatterhand risks his life to save Winnetou. At night he sneaks into the Kiowa camp and frees the chief’s son from his fetters. Winnetou escapes but does not see his savior.
Now Old Shatterhand and his supporters begin a crusade against Santer and his henchmen. They march to Santer’s stronghold, a town called Roswell, where a tremendous fight erupts. But Winnetou also has unfinished business with Santer and goes there too. As an outsider he cannot tell the good from the bad ones, and he and his warriors attack the entire town.
Old Shatterhand is wounded and captured. Winnetou has him brought to the Apache village, where Intschu-tschuna's daughter Nsho-tshi [Marie Versini] helps him survive.
After he recovers, he must stand trial. He claims an ordeal by battle. Chief Intschu-tschuna himself takes him on and Old Shatterhand narrowly wins.
After the ordeal, Old Shatterhand and Winnetou become official friends.
Although this tribe is moving toward civilization and the leading family is already building houses, Nsho-tshi wants to attend school in St. Louis before she marries Old Shatterhand. To cover the looming expenses, her family turns to their source of gold.
Santer remains alive and continues to pursue his evil plans. He ambushes them, Winnetou’s father dies in the fighting, and Nsho-tshi dies shortly thereafter in the arms of Old Shatterhand.
