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In the 13th century, after several years of political unrest, Scotland is invaded and conquered by King Edward I of England (known as "Longshanks") (McGoohan).
Young William Wallace witnesses the treachery of Longshanks, survives the death of his father and brother, and is taken abroad by his uncle where he is educated. Years later, Longshanks grants his noblemen land and privileges in Scotland, including Primae Noctis, the right of the lord to take a newly married Scottish woman into his bed on the wedding night. When he returns home, Wallace (Gibson), intending to live peacefully, falls in love with his childhood sweetheart Murron MacClannough (McCormack), and they marry in secret so that she does not have to spend a night in the bed of the English lord.
When an English soldier tries to rape Murron, Wallace fights off several soldiers and the two attempt to flee. But Murron is captured and publicly executed by the village sheriff, who proclaims "an assault on the King's soldiers is the same as an assault on the King himself." In retribution, Wallace and several villagers slaughter the English garrison and execute the sheriff.
Wallace is now compelled to rebel against the English, and as his legend spreads, hundreds of Scots from the surrounding clans join him. Wallace leads his army to victory at the Battle of Stirling, then sacks the city of York. All the while, Wallace seeks the assistance of Robert the Bruce (Macfadyen), son of nobleman Robert the Elder, and chief contender for the Scottish crown. Despite his growing admiration for Wallace and his cause, Robert is dominated by his father, who wishes to secure the throne for his son by submitting to the English.
Longshanks, worried by the threat of the rebellion, sends the wife of his son Edward, the French princess Isabelle, to try to negotiate with Wallace, hoping that Wallace kills her and the French king declares war on Wallace in revenge. Wallace refuses the bribe sent with Isabelle by Longshanks, but after meeting him in person, Isabelle becomes enamored with him. Meanwhile, Longshanks prepares an army to invade Scotland.
Warned of the coming invasion by Isabelle, Wallace implores the Scottish nobility, who are more concerned with their own welfare, that immediate action is needed to counter the threat, and to take back the country. Leading the English army himself, Longshanks confronts the Scots at the Battle of Falkirk where noblemen Lochlan and Mornay betray Wallace. The Scots lose the battle, and Wallace is wounded. As he charges toward the departing Longshanks on horseback, Wallace is intercepted by one of the king's lancers, who turns out to be Robert the Bruce. Remorseful, Bruce gets Wallace to safety before the English can capture him. Wallace kills Mornay and Lochlan for their betrayal, avoids assassination attempts, and wages a protracted guerrilla war against the English.
Robert the Bruce, intending to join Wallace and commit troops to the war, sets up a meeting with him in Edinburgh where Robert's father has conspired with other nobles to capture and hand over Wallace to the English. Learning of his treachery, the Bruce disowns his father. Following a tryst with Wallace, Isabelle exacts revenge on the now terminally ill Longshanks by telling him she is pregnant with another man's child, intent on ending Longshank's line and ruling in his son's place.
In London, Wallace is brought before an English magistrate, tried for high treason, and condemned to public torture and beheading. Even after being hanged and mutilated, Wallace refuses to submit to the king by begging for mercy. As cries for mercy come from the watching crowd, the magistrate offers him one final chance. Wallace instead shouts the word "Freedom!" Just before the axe falls, Wallace sees a vision of Murron in the crowd smiling at him.
Years after Wallace's death, Robert the Bruce, now Scotland's king, leads a Scottish army before a ceremonial line of English troops on the fields of Bannockburn where he is to formally accept English rule. As he begins to ride toward the English, the Bruce stops and turns back to his troops. Invoking Wallace's memory, he implores them to fight with him as they did with Wallace. He then leads his army into battle against the stunned English, winning the Scots their freedom.