The movie chronicles the journey of the 1980 US Olympic Men's ice hockey team. The opening credits feature a montage of the 1970s, depicting events such as Watergate and the Iran hostage crisis. Then University of Minnesota head coach Herb Brooks (played by Kurt Russell) interviews with the United States Olympic Committee, discussing his philosophy on how to beat the Soviet team. Despite the fact ...that they seem very skeptical of his ambitious goal, Brooks is hired.
Brooks meets his assistant coach Craig Patrick at the tryouts in Colorado Springs. However, Brooks selects a preliminary roster of 26 -- later to be cut to a final roster of 20 -- indifferent of the tryouts and the preferences of senior USOC hockey officials. Brooks tells Patrick, "I'm not looking for the best players, I'm looking for the right ones." He convinces Walter Bush, the executive director of the committee that he has their best interests at heart. Brooks says that he selected these 26 players through preparation in advance, explaining how he's researched this, coaching many of them, talking with coaches and scouts about players he hasn't coached himself. Bush agrees to take the heat from the committee, saying, "I'll back you up on this one."
Coach Brooks has the boys take a 300-page psychological test. Jim Craig declines to take it. He's suffering through a family tragedy and is morose and intractable. Coach Brooks lets it go, saying mysteriously that Craig has taken the test.
During the initial practice, tempers flare as forward Rob McClanahan and defenseman Jack O'Callahan get into a fight based on an old college rivalry. Brooks bluntly tells the players that they are to let go of old rivalries and start becoming a team. He then calls for introductions, in which each player states his name, his hometown, and for whom he plays. This is repeated over and over, somehow the coach is trying to get at something but they don't know what it is.
The coach starts the team on an exhausting conditioning drill (which became known as "Herbies"), in which the team sprints together back and forth across the ice, over and over.
Coach Brooks is working so hard his family life is suffering. He has a deep confrontation with his wife and they arrive at an understanding that this is something he must do, a fulfillment of his life's ambition since he had been cut from playing on a previous Olympic team at the last minute.
During an exhibition game against the Norwegian National Team in Oslo that ends in a 3–3 tie, Brooks notices the players are distracted by pretty girls in the stands and not playing up to their potential. After the game, in a wrenching scene, he makes them run "Herbies" far into the night. Although the arena empties and the lights are turned off, Brooks continues the brutal drill; many players are on the verge of collapse; Doc Nagobads and coach Patrick are getting very concerned, on the point of stopping the drill, but Brooks won't listen. Finally exhausted forward Mike Eruzione shouts, "Mike Eruzione, (from) Winthrop, Massachusetts;" when Brooks asks him "Who do you play for?," Eruzione responds with the answer that Herb had wanted all along, "I play for the United States of America!" and the drill is over.
Brooks also brings in Tim Harrer, a star from Brooks' University of Minnesota team, to test the players commitment. Despite having a good year playing with his current team, the University of Minnesota, some feel Harrer is an obstacle to them making the final roster, but mainly he didn't fit within their "family". Having gotten them to realize this, Coach Brooks drops Harrer from the lineup. Just before the Olympic Games are to begin, Brooks has to make the final cut to the required 20 with Ralph Cox. Herb says at one point he didn't realize it would be this hard.
The team plays the Soviets in an exhibition game at Madison Square Garden. The Russians manhandle the young American team, winning by a score of 10-3. During the game, O'Callahan receives an injury that could keep him out of the entire Olympics, and starting goaltender Jim Craig is told he may be benched in favor of back-up goalie Steve Janaszak. Craig ends up retaining his starting job when the coach brings him to realize that he hasn't been giving his very best. "I want to see that kid in the goal that wouldn't take the test", ie. that rebellious angry streak is what is needed right now.
As the Olympic tournament begins, the Americans trail Sweden, 2-1 in the first game. Brooks fires up the team during the break by slamming a table out of his way and accusing injured McClanahan of quitting (Doc had said his injury wouldn't get worse if he played on it.) McClanahan ends up playing despite his pain, and the inspired American team came through as Bill Baker scores a goal in the final minute for a dramatic 2-2 tie. They follow that up with a 7-3 win over heavily favored Czechoslovakia, then victories over Norway, Romania and West Germany to earn a spot in the medal round.
The Americans are considered overwhelming underdogs to the Soviets in the first medal round game. Before the game Brooks gives the team an inspirational speech in which he tells them, "I'm sick and tired of hearing what a great team the Soviets have. You are going to go out there and beat them because you can!" Goalie Craig finds that his father is in the stands and the emotions soar. The game begins and following a slash which doesn't get called a penalty, the Russians score the first goal. Then O'Callahan, having healed enough from his injury, enters the game for the first time. He makes an immediate impact by knocking down Vladimir Krutov on a play that leads to a goal by Buzz Schneider. Following another Soviet goal the first period winds down. In the final seconds the Soviet goalie Vladislav Tretiak stops a long shot by Dave Christian, but Mark Johnson gets the rebound and scores with less than one second left in the period - the clock shows 00:00. Despite the protests of the Soviet coach, Tikhonov, the goal counts, and the teams leave the ice tied 2–2.
During the first intermission the Soviet coach replaces Tretiak with backup Vladimir Myshkin, causing Brooks to tell his players, "Boys, you've just put the best goaltender in the world on the bench!" Early in the second period the Soviets score a goal to go up 3–2, and Craig is knocked down on the play, has a lot of trouble getting up; but he shakes it off. As the third period is about to begin, Brooks calls the team over for one final inspiration, telling them, as the crowd chants "USA, USA" over and over again and says, "Listen to them. That is what you've done here tonight. Now we've come from behind in every game in this tournament, and we can do it again...We can beat these guys!" Early in the final period the Soviet team is called for a penalty, giving the Americans a man advantage. Johnson scores his second goal of the game just as the penalty is about to expire. Television announcer Al Michaels asks his partner Ken Dryden, "A couple of months ago, did you think this was even remotely possible?" Later Eruzione enters the game and scores to give the US a 4-3 lead; it would turn out to be the game-winning goal. The entire team skates onto the ice as the crowd celebrates.
Now, however, the US team goes into a bunker mode, as the Soviet team becomes increasingly aggressive to score in the final ten minutes. As the game winds down, Brooks reminds the team to remain poised and play their game, while the now-desperate Soviet coach unravels and forgets to pull his goalie. In the final seconds Michaels gives his famous exclamation, "Do you believe in miracles?! Yes!!!" The players rush onto the ice in ecstasy and mob USA captain Mike Eruzione and goalie Jim Craig, and Brooks, after receiving a hug from his assistant Craig Patrick, a nod from the Soviet coach, and a smile from wife Patti in the stands, leaves the ice for a moment of solitude. The Americans go on to defeat Finland to clinch the gold medal. The movie ends with Brooks beaming with pride as the entire team crowds together on the gold medal platform.
As the music plays and everyone's cheering, the voice of Herb Brooks reminds us that now the USA sends "Dream Teams" made up of NHL stars to the Olympics now, but they don't realize the dream. The 1980 team won on teamwork and conditioning, whereas these guys are all about individual skills.