The legendary hero fights to reconcile a developer with the Natives whose land he wants to mine.

After being secretly assigned by the governor to investigate unrest that has been festering between the Indian and white people of the territory, the masked rider known as The Lone Ranger and his faithful Indian companion, Tonto, head for the cow town of Brasada. On the outskirts of town, they witness a band of Indians attack rancher Pete Ramirez and come to his rescue. After ruefully recounting how the Indians slaughtered his small herd of cattle, Ramirez warns the masked man to steer clear of the town. The next day, the governor comes to Brasada, posing as a guest of wealthy rancher Reece Kilgore, so that he can meet covertly with The Lone Ranger. At a mission church, the governor keeps his appointment with The Lone Ranger, who, disguised as an old prospector, shows him a silver bullet, the mark of The Lone Ranger. After conferring with the governor, The Lone Ranger and Tonto proceed to the Indian reservation, where Chief Red Hawk promises to keep the peace and confides that his braves are furious because of the spurious accusations of the whites. In Brasada, meanwhile, Cassidy, Kilgore's foreman, assembles a crew to drive the herd to Abilene, and Ramirez reluctantly joins them. En route to Abilene, Cassidy rustles the herd owned by Sheriff Kimberly's father and shoots the old man. Upon reaching Abilene, Ramirez notices a shipment of dynamite addressed to Kilgore and soon after, is murdered in his room. When Ramirez fails to return with the others, The Lone Ranger sends Tonto into Brasada to inquire about him. Seeing Tonto, an Indian, wearing a gun, Kilgore attacks him. Although he fights valiantly, Tonto is captured by Kilgore, but manages to send his riderless horse back to The Lone Ranger, who rides to town and frees Tonto, thus saving him from a lynching. Disguised once again as the old prospector, The Lone Ranger travels to Abilene and from the storekeeper learns about the dynamite shipment and Ramirez' murder. He and Tonto then return to the reservation, where they find the Indians, led by Angry Horse, who has taken control from the ailing Red Hawk, preparing for war. While riding back to their camp, they spot four Indians burning a rancher's field and capture them and take them to Kimberly's office. When the Indians are unmasked as white men working for Kilgore, The Lone Ranger sends the sheriff to the governor's office to arrange for Kilgore's arrest. Kilgore, meanwhile, is inciting the ranchers to war against the Indians. He sends his daughter Lila to safety, but refuses to permit his wife Welcome to accompany her because he hates her for failing to bear him a son. Shortly after Lila departs, an arrow bearing her scarf is shot into Kilgore's door. Learning of the child's abduction, The Lone Ranger goes to the reservation and battles Angry Horse. After winning the fight, The Lone Ranger rescues Lila and takes her to her mother, who tells him of Kilgore's treachery. While the townspeople gather at Pilgrim's Crossing, Kilgore goes to Spirit Mountain to obtain dynamite to use against the Indians. Alone, The Lone Ranger attempts to stop him and his men, but Kilgore wounds him and flees, leaving the dynamite behind on a pack mule. Soon after, Tonto locates his wounded friend and the two discover that the mountain is laden with silver, and that Kilgore has been fomenting unrest to gain control of the mountain. Together, they take the dynamite to a narrow pass leading to the reservation, and keep the warring factions apart by hurling dynamite sticks at them. Kimberly, leading a cavalry troop, finally arrives with a warrant for the arrest of Kilgore and Cassidy. When accused of murdering Ramirez, Kilgore turns on Cassidy, who shoots him. Cassidy attempts to flee, but The Lone Ranger pursues and apprehends him. Several weeks later, The Lone Ranger goes to visit the mission church where Lila and Welcome have sought refuge. As Welcome swears to absolve the name of Kilgore, The Lone Ranger and Tonto depart before she can thank them.