Teenager Grace MacLean (Johansson) and her best friend Judith (Kate Bosworth) go out early one winter's morning to ride their horses. As they are riding up an icy slope, one of the horses falls, dragging both horses and girls onto a road where a truck appears, resulting in a horrific collision. Judith and her horse (Gulliver) are killed, while Grace and her horse (Pilgrim) are both severely injured.

Grace eventually recovers physically, though she is left permanently disabled by a partial leg amputation and remains listless and psychologically scarred. However, her horse is traumatized and uncontrollable to the extent where it is strongly suggested he should be humanely put down. In an attempt to heal both her daughter and the horse, Grace's mother Annie (Kristin Scott Thomas) contacts Tom Booker (Redford), a "Horse Whisperer", who reluctantly agrees to help, on the condition that the despondent Grace takes part in the process. Matters are complicated more when Annie begins to fall in love with Booker, even though she is married to Grace's father (played by Sam Neill).