Wyoming in the 1880's is a beautiful wilderness of spectacular mountains and fertile valleys. Into one such valley Shane, the lonely gunfighter, comes riding.
He happens upon a local war between the ranchers and the homesteaders. Rufe Ryker, the rancher, won this valley from the indians and resents the squatters who have "fenced me off from water". The valley should, he believes, be open cattle range. Joe Starrett is the natural leader of the homesteaders. He sees the future of America in terms of communities - people should settle the land and work it, and build schools and churches.
As Shane rides onto Starrett's spread, he is greeted by idyllic domesticity. Joe is chopping wood, Little Joey is playing and Marian sings as she fixes supper. Both Shane and Starrett bristle ... "I didn't expect to find any fences around here," says Shane, and Joe takes Shane for one of Ryker's troublemakers.
The tension subsides and Shane stays overnight. The pain in his face when Marian serves a wedge of apple pie denotes a longing for a happy home life and the love of a good woman. Marian, too, is affected by Shane. She hides coyly in the kitchen, then brings out the best crockery for her guest.
In return for the hospitality, Shane starts chopping at the stubborn old treestump. Starrett joins him, and the two men toil to defeat the stump, bonding in friendship as they symbolically tame the frontier wilderness.
Ernie Wright stops by. He is a homesteader who wants out because of Ryker's bullies, but Starrett persuades him to stay. Shane agrees to work for Joe, because he sees that Joe is this community's anchor, and he will need help in the confrontation to come.
The homesteaders keep to the valley floor, the cowboys haunt the township. Farmers stay on their spreads, raising their families and working the land. The cowpokes are single men whose only fixed point is Grafton's saloon.
Old man Grafton has two businesses on adjoining premises, but they are separate universes. Homesteaders patronise the general store, making expeditions for clothes, nails and food, bonnets for the women and candy for the kids. The saloon is where Ryker's thugs spend their day. The listless, pointless existence is enlivened only when a 'sodbuster' strays in, giving them someone to bully.
Under orders from Joe not to get into trouble, Shane ventures into the saloon and is picked on by Ryker's men. With enormous self-restraint, he allows himself to be humiliated.
Joe calls a homesteaders' meeting. The budding community looks to Starrett as its leader. The farmers decide to do their shopping en masse, to minimise exposure to the cattlemen. When Marian warns Little Joey not to "get to likin' Shane too much", we know that she has fallen in love.
The mass shopping expedition is a turning-point. Shane settles his score with the bullies, and he and Joe, fighting back-to-back, take on Ryker's men and win. This prompts Ryker to send to Cheyenne for Wilson, the hired killer.
Wilson exudes evil. The lithe, black-hatted gunslinger never works. He sits around the saloon all day, a brooding alien presence in the valley. At the face-off on Starrett's spread, Shane watches intensely as Wilson backs his horse out with sinister elegance.
It is Wilson's function to goad the homesteaders into drawing against him, so that he can gun them down. 'Stonewall' Torey is the obvious first choice, being a recklessly brave hothead. The confrontation is a thrilling piece of cinema ... Shipstead's three plaintive cries which almost pull Torey back from the brink ...the bleak, muddy street .... the awful inevitability.
The funeral is another cinematic triumph. The mourners are dramatically silhouetted against the vast sky as the dog pines for his dead master. Down on the valley floor, the township with its saloon glowers like a stain on the landscape.
The homesteaders are all for quitting until they see that Fred Lewis's place has been set ablaze by Ryker's men. This has two plot consequences. The sodbusters now resolve to stay and build a community, and Starrett decides to ride in and settle things with Ryker.
Shane cannot allow this. He knows that Joe is no match for Wilson. Starrett hints that there is a certain appropriateness about being killed in this way. He knows that Marian will be looked after, and that Shane will stand up to Ryker ...
And so the two friends fight. This is a cataclysm for Marian and Joey, and it shakes the foundations of their world. While the fight proceeds, out of our view, Marian and Joey hurry from window to window, as if in a shipwreck. When the camera moves out into the yard, we see the fistfight through the legs of terrified horses. Dogs quiver in fear. The Starrett universe is in turmoil.
In the final scene in the barroom, Shane tells Tyker the cruel truth - the old man has lived too long. Ryker's dream has passed from the earth. When the violence is done, Shane rides off into the dawn, wounded and alone. He knows that his dream, too, has passed him by.
The dawn symbolises the new era of peace and prosperity in the valley. As Shane leaves it behind, Joey's innocently ironic words echo back from the sierra - "And mother wants you. I know she does!"