During the tumultuous period of the U.S. Civil War, a train carrying gold for the Yankee army is ruthlessly ambushed by a group of Confederate soldiers, commanded by the cunning Captain Pierre Cordona (Jorge Rivero). In response, Union Colonel Cord McNally (John Wayne) leads his men in a fierce pursuit of the robbers. As the Confederate group splits up to evade capture, McNally divides his forces as well, unwittingly leading himself into a trap. While alone in the forest, he encounters Cordona but is soon overpowered by Sergeant Tuscarora Philips (Christopher Mitchum), taken hostage, and forced to guide them through Union territory.
As they approach a Union camp, McNally seizes an opportunity and escapes, capturing Cordona in the process. Though most of his assailants manage to flee, McNally wrestles Tuscarora into captivity and demands answers regarding the repeated theft of Union gold. He suggests a chance for escape, but both Cordona and Tuscarora refuse to divulge critical information, leading to their confinement in a prisoner-of-war camp.
Once the war concludes, Cordona and Tuscarora prepare for release, where they are met by McNally, who warmly invites them for a drink. Displaying his sense of fairness, McNally absolves them of their wartime actions, but he seeks justice against the traitor who has continuously relayed information about the army’s gold shipments. A tragic loss haunts him as he recounts the injury of his friend Lieutenant Forsythe, who died during the robbery.
The narrative takes a turn when McNally receives word from Cordona, now staying at a local hotel. Unexpectedly, they encounter Shasta Delaney (Jennifer O'Neill), who comes bearing troubling news of a murder back in Rio Lobo, committed by a deputy of the sheriff. Frustratingly, the local sheriff Pat Cronin ([Bill Williams]) explains that there’s little he can do due to jurisdiction issues. When the Rio Lobo deputies arrive to arrest Shasta, a fight ensues, during which she demonstrates her tenacity by shooting one of the deputies in self-defense. It is Cordona who fortuitously saves McNally from impending doom, recognizing the deceased deputy as one of the informants from the war.
As the plot unfolds, Shasta, now feeling woozy from her ordeal, is taken to Cordona's room by McNally for rest. There, Cordona discusses the ongoing troubles in Rio Lobo and expresses hope for a collaboration to resolve the land conflicts besieging Phillips, who is portrayed by Jack Elam. Shasta offers her assistance, claiming familiarity with the region and its inhabitants.
In a daring act, the trio infiltrates Rio Lobo under cover of darkness, where they meet Maria ([Susana Dosamantes]) and face the cunning Sheriff Tom Hendricks ([Mike Henry]). Tensions rise as McNally witnesses the unjust treatment of Tuscarora, who is unjustly accused and beaten. Hiding under the guise of a dental patient, McNally receives crucial insights from Doc Jones ([David Huddleston]), regarding the newly appointed sheriff's unsavory connections and illegal operations.
As the story reaches its climax, McNally and his allies devise a plan to confront the corrupt leadership in town. They attempt to orchestrate a rescue for Phillips while planning to extract valuable information from Ketcham ([Victor French]), an influential figure in town. The ensuing skirmishes reveal long-standing grievances, betrayal, and the harsh realities of a post-war society.
In the final confrontation, as the pieces fall into place, McNally, Cordona, and Tuscarora engage in a fierce battle against the corrupt authorities. As gunfire erupts, allegiances are tested, and lives hang in the balance. Ultimately, McNally's resolve to restore order leads to decisive actions against Hendricks's men, culminating in a satisfying resolution for Rio Lobo. Tuscarora finds solace with Maria, while Cordona and Shasta rekindle their bond, and McNally departs with Amelita, leaving behind a town finally liberated from the shadow of corruption.
