In the midst of the American Civil War, a wounded Union Army Lieutenant makes a personal request to be reassigned to a remote outpost on the western frontier. Granted his new post at Fort Sedgewick, he soon finds the outpost abandoned and sets about making a life for himself in the vast, empty landscape. Exploring the territory, he encounters a neighboring Sioux tribe. Initially met with mutual distrust and cultural misunderstandings, he slowly begins to earn the respect of the local people, learning their ways and forging a mutual respect grounded in curiosity and survival.

As the lone soldier immerses himself in the Sioux culture, he is given the name "Dances With Wolves" by the tribe, and he develops a deep bond with them, particularly with a mysterious white woman who has been raised by the Sioux since childhood. His burgeoning relationship with the woman and his loyalty to the tribe start to create a new sense of identity, drawing him farther from his military past. As he becomes more absorbed in the local way of life, he is faced with the tension between his life with the Sioux and the inexorable advance of the United States frontier, setting the stage for a series of moral and personal dilemmas.