The film opens when Ron Kovic is a young boy living in Massapequa, Long Island, New York. He grows up in a patriotic and Catholic household, instilling within him a strong sense of pride in his country and his religion. As a teenager, and a top member of his high school's wrestling team, he proves himself physically fit and athletic, as well as an exceptional student academically. When local Marine recruiting NCOs visit his school and give Ron and his fellow seniors an impassioned lecture about the Corps, Ron decides to enlist. He misses his prom, because he is unable to secure a date with his love interest, Donna. He confronts her at the prom and has a dance with her on his last night before leaving.
The film then moves to Kovic's second Vietnam tour in 1968. Now a Marine sergeant and on patrol, his unit massacres a village of Vietnamese citizens, believing them to be enemy combatants. During the retreat, Kovic becomes disoriented and accidentally shoots one of the new arrivals to his platoon, a younger Marine private first class, named Wilson, who ends up in the line of firing between sides. Despite the frantic efforts of the Navy Corpsman present who try to save him, Wilson later dies from his wounds, this action leaves a deep impression on Kovic. Overwhelmed by guilt, Kovic appeals to his executive officer (XO), who merely tells him to forget the incident. The meeting has a negative effect on Ron, who is crushed at being brushed off by his XO.
The platoon goes out on another hazardous patrol a few weeks later. During a firefight, Kovic is critically wounded and trapped in a field facing sure death, until a fellow Marine rescues him. Paralyzed from the mid-chest down, he spends several months recovering at the Bronx Veterans Administration hospital. The living conditions in the hospital include rats that crawl freely on the floors, a staff that is generally apathetic to their patients' needs, doctors that visit the patients infrequently, drug use that is rampant, and equipment that is too old and ill-maintained to be useful. He desperately tries to walk again with the use of crutches and braces, despite repeated warnings from his doctors. However, he soon suffers a bad fall that causes a compound fracture of his thighbone. The injury nearly robs him of his leg, and he vehemently argues with the doctors who briefly consider resorting to amputation.
Ron returns home, permanently in a wheelchair, with his leg intact. At home, he begins to alienate his family and friends, complaining about students staging anti-war rallies across the country and burning the American flag. Though he tries to maintain his dignity as a Marine, Ron gradually begins to become disillusioned, feeling that his government has betrayed him and his fellow Vietnam Veterans. In Ron's absence his younger brother Tommy has already become staunchly anti-war, leading to a rift between them. His highly religious mother also seems unable to deal with Ron's new attitude as a resentful, paralyzed veteran. His problems are as much psychological as they are physical and he quickly becomes alcoholic and belligerent.
Ron's disillusionment grows severe enough that he has an intense fight with his mother after returning home drunk one night after having a barroom confrontation with a World War II veteran that fought on Iwo Jima who expressed no sympathy to Ron. Ron travels to a small town in Mexico ("The Village of the Sun") that seems to be a haven for paralyzed Vietnam veterans. After venting his rage at his mother's embarrassment over having a disabled son, he has an emotional conversation with his father, and he later leaves home for good. He has his first sexual experience with a prostitute he believes he's in love with. Ron wants to ask her to marry him but when he sees her with another customer, the realization of real love versus a mere physical sexual experience sets in, and he decides against it.
Ron joins Vietnam Veterans Against the War (VVAW) and travels to the 1972 Republican National Convention in Miami. He and his compatriots force their way into the convention hall during Richard Nixon's acceptance speech and cause a commotion that makes it onto the national news. Ron himself tells a reporter about his negative experiences in Vietnam and the VA hospital conditions. His interview is cut short when guards eject him and his fellow vets from the hall and attempt to turn them over to the police. They manage to break free from the police, regroup, and charge the hall again, though not so successfully this time. The film ends with Kovic speaking at the 1976 Democratic National Convention, shortly after the publication of his autobiography Born on the Fourth of July.