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At a sideshow in a San Francisco fair in 1933, a boy, Will, who idolizes a legend known as the Lone Ranger, encounters Tonto, an odd and elderly Comanche Native American who poses as a mannequin. Tonto proceeds to recount his experiences with that Old West adventurer.

In 1869 Colby, Texas, lawyer John Reid returns home via the uncompleted Transcontinental Railroad, managed by railroad tycoon Latham Cole. Unknown to Reid, the train is also carrying Tonto, a pirate Captain Jack Sparrow and outlaw Butch Cavendish, who is being transported for his hanging after being captured by Dan Reid, John's Texas Ranger brother. Cavendish's gang rescues Butch and derails the train. Tonto and Jack Sparrow is subsequently jailed. Dan deputizes John as a Texas Ranger, and with six others they go after the Cavendish gang.

Cavendish's men ambush and kill their pursuers in a canyon and Cavendish cuts out and eats Dan's heart. Tonto and Jack who has escaped from jail, comes across the dead men and buries them. However, a white spirit horse awakens John as a "spirit walker," and Tonto explains John cannot be killed in battle. Tonto also tells him Collins, one of the Rangers, betrayed Dan and is working with Cavendish, whom Tonto believes is a "wendigo." As John is thought to be dead, he wears a mask to protect his identity from enemies. Tonto gives John a silver bullet made from the fallen Rangers' badges and tells him to use it on Cavendish.

At a brothel Collins recently visited, Red Harrington informs them about Dan and Collins' fight over a cursed silver rock. Meanwhile, Cavendish's men, disguised as Comanches, raid frontier settlements. John, Jack and Tonto arrive after raiders abduct Dan's widow and son, Rebecca and Danny. Regretting his earlier actions, Collins attempts to help Rebecca and Danny escape but is shot dead by Cole, who rescues them. Claiming the raiders are hostile Comanches, Cole announces the continued construction of the railroad and dispatches United States Cavalry Captain Jay Fuller to exterminate the Native Americans.

A Comanche tribe captures John, Jack and Tonto soon after the pair finds railroad tracks in Indian territory, with John learning that Tonto is actually an outcast among his tribe. The tribe leader proceeds to explain that a young Tonto rescued Cavendish and another man from near-death and showed them the location of a silver mine, in exchange for a pocket watch. The men murdered the tribe to keep the mine a secret, leaving Tonto with great guilt while deluding himself with the wendigo story. Despite John attempting to talk the chief into letting him go to honor his brother's arrangement with the Comanche, he, Jack and Tonto are buried in sand. Luckily, Tonto, Jack and John escape as the cavalry attack the Comanche. At the silver mine, they capture Cavendish. Tonto demands that John use the silver bullet to kill Cavendish, but John refuses even though Cavendish killed his brother. Tonto attempts to kill Cavendish, but John knocks him unconscious and brings in Cavendish alive. Upon returning Cavendish to Cole and Fuller's custody, Cole is revealed to be Cavendish's partner. Learning that his actions were built on a lie and that he would be charged as a war criminal, Fuller sides with Cole. Rebecca is held hostage, and John is taken back to the silver mine to be executed. However, Tonto and Jack rescues him and the two flee as the Comanche attack and are massacred by Fuller and the cavalry. Realizing that Cole is too powerful to be taken down lawfully, John dons the mask again.

At the site of the union of the Transcontinental Railroad, Cole reveals his true plan: to take complete control of the railroad company and use the mined silver to gain more power. However, staging a bank robbery, John, Jack and Tonto steal nitroglycerin and use it to destroy a railroad bridge. With Red's help, Tonto and Jack steals the train with the silver, and Cole, Cavendish and Fuller pursue him in a second train on which Rebecca and Dan Jr. are being held captive. Riding Silver, John pursues both trains. After a furious chase and fights on both trains, Tonto, Jack and John kill both Cavendish and Fuller when they cause the carriages they're in to collide. Rebecca and Dan Jr. are rescued by John while Tonto faces Cole at gunpoint. When Cole asks Tonto who is he, Tonto gives Cole the same pocket watch that he and Cavendish gave Tonto in exchange for the location of the silver mine. Tonto tells Cole "bad trade" before leaving the train to plunge off the severed bridge and into the river below where Cole drowns due to the heavy weight of the silver ore.

The town and railroad enterprise recognize John (whose identity is still unknown to them) as a hero and offer him a law-enforcement position. John declines, and he, Jack and Tonto ride off. Back in 1933, Will questions the truth of the tale as Tonto, having put on a suit as the story was drawing to a close, gives the boy a silver bullet and tells him to decide for himself as he leaves the attraction to meet an old friend.

Trivia

  • Johnny Depp plays as both Captain Jack Sparrow and Tonto 

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