At a vibrant sideshow during the 1933 San Francisco fair, a young boy named Will, who looks up to the legendary Lone Ranger, crosses paths with the enigmatic Tonto, portrayed by Johnny Depp. Tonto, an elderly Comanche Native American, begins to share his captivating tales from the Old West involving the famed adventurer.
The story then transports us back to March 18, 1869, in Colby, Texas, where attorney John Reid returns home aboard an incomplete Transcontinental Railroad overseen by railroad mogul Latham Cole. Unbeknownst to John, the train is also carrying Tonto and the notorious outlaw Butch Cavendish, who is en route to his hanging after having been captured by John's brother, Texas Ranger Dan Reid. During a daring escape by Cavendish's gang, chaos ensues, leading to a train derailment and a brutal confrontation in which Tonto attempts to end Butch's life for reasons yet unrevealed. Once the chaos settles, Tonto finds himself imprisoned, while John Reid is sworn in as a Texas Ranger by Dan, setting off on a mission to pursue the Cavendish gang.
However, tragedy strikes when Cavendish's men ambush John and Dan along with their fellow Rangers, resulting in their brutal demise. In a gruesome act, Cavendish savors Dan's heart, leaving Tonto to uncover the fallen and give them a proper burial. It is at this moment that John is resurrected as a "spirit walker," a term Tonto uses to explain John's unique ability to survive battle. Tonto reveals to John that Collins, one of the Rangers, has betrayed Dan and is in cahoots with Cavendish, whom Tonto describes as a "wendigo," a malevolent spirit of the desert. To mask his identity from the enemies who think him dead, John dons a mask and is given a silver bullet crafted from the fallen Rangers' badges, intended for Cavendish.
Determined, John and Tonto team up to track down the malevolent Butch, with Tonto revealing he has been pursuing the outlaw for a staggering 126 years, although the reason remains shrouded in mystery. At a nearby brothel, Helena Bonham Carter as Red Harrington informs the duo about conflicts involving Dan and Collins over a cursed silver rock. Meanwhile, Cavendish's gang, masquerading as Comanches, launches raids on frontier settlements, and John and Tonto arrive just in time to confront the situation, as Dan's widow and son, Rebecca and Danny, have been abducted.
Though he initially betrayed them, Collins redeems himself by attempting to rescue Rebecca and Danny, only to meet his end at the hands of Cole, who manipulates the situation to further his interests. Claiming the raiders are hostile Comanches, Cole pushes onward with his plans to extend the railroad into sacred Indian territory and sends Captain Jay Fuller of the U.S. Cavalry to eliminate the perceived threat from the Comanche people. At that moment, construction begins on a substantial railroad bridge that demarcates the line between the white settlers and the Comanche.
Captured by a group of Comanche, John and Tonto learn from their chief about Tonto's past, revealing a shocking connection: Tonto had saved Cavendish and Cole in their youth from certain death and had guided them to a hidden silver mine. This action led to devastating consequences for Tonto's tribe, who were murdered to keep their discovery a secret. Burdened with guilt over the events, Tonto has vowed vengeance on the two men.
As they plot their next steps, Tonto and John escape the Comanche camp just as the cavalry launches an assault. Their ultimate confrontation occurs at the silver mine, where they manage to capture Cavendish after a fierce battle. Tonto insists that John should kill Cavendish with the silver bullet, but John refuses, questioning Tonto's tall tales and discarding the mask given to him. Meanwhile, Fuller seemingly rescues Rebecca and Danny from Cavendish's clutches, bringing them into the hands of Cole, who aims to manipulate their fate for his own gain.
With the realization of Cole’s duplicitous intentions, John and Tonto devise a plan to blow up the railroad bridge to thwart Cole's ambitions. They execute a daring robbery to obtain nitroglycerin to destroy the bridge. Armed with courage and skill, John pursues two trains—one carrying the hostage Rebecca and Danny, and the other loaded with the ill-gotten silver. A thrilling chase ensues, culminating in both Cavendish and Fuller’s demise, with John heroically rescuing Rebecca and Danny amidst the chaos.
Finally, Tonto confronts Cole, returning the watch that once held great value and symbolizing their shared past, leading to Cole's downfall as he becomes buried beneath the weight of his greed when the train falls from the severed bridge into the river below. The local townsfolk, unaware of John's identity, hail him as a hero, offering him a position in law enforcement, which he graciously declines, opting instead to ride off alongside Tonto.
Back in 1933, as Will listens in rapt attention, he questions the truths of these tales. Before departing, Tonto bestows upon him a silver bullet, suggesting he ponder the realities behind the legend. Glancing back, Will sees a crow flit by, prompting a moment of reflection. In a light-hearted credits scene, an older Tonto, now dressed in a suit and carrying a suitcase, strolls through a canyon, hinting at the ongoing adventures yet to unfold.
