1943. British prisoners of war arrive at the Japanese Camp 16 in the Malayan jungle. They are to replace prisoners who died working on the 'death railway' between Burma and Siam. The new arrivals, commanded by Colonel Nicholson, march into camp whistling, watched by Shears, an American sailor.

Nicholson insists to the Japanese commander, Colonel Saito, that his officers will not carry out manual labour. The British soldiers are shown their new quarters, where they meet Shears.

Saito addresses the new arrivals and gives them their orders. Nicholson reiterates that his officers will not do manual labour, producing the Geneva Convention code to support his stand. Saito takes the leaflet and strikes Nicholson across the face with it, drawing blood, then tears it up and throws it on the ground. When Nicholson persists, Saito takes his staff of office and breaks it. The Japanese colonel then sends the British soldiers out of the camp and tells Nicholson that his officers must work alongside them. The British medical officer intervenes, but Saito ignores him and goes inside his hut. Nicholson and the officers are left to stand in the heat of the day. The rest of the contingent return that evening to find the officers still standing outside. One has fainted.

The officers are ordered to the detention hut, but Nicholson is taken to Saito, causing an outcry from his men. Nicholson is beaten, then taken for incarceration in the 'oven', a tiny, box-like structure. In the ensuing mayhem, a soldier is shot and Shears kills one of the guards. Many more soldiers are shot trying to escape, but Shears manages to get away.

After Nicholson has been in the 'oven' for three days, the British medical officer, Major Clipton, confronts Saito, who tells him that if Nicholson does not allow the officers to work, the patients in the hospital will be made to do so. Clipton tries to change Nicholson's mind, reminding him that the officers are still being held in detention. In his opinion, both Saito and Nicholson are mad.

Before allowing them to have their Red Cross parcels, Saito reminds the British soldiers that work on the bridge is behind schedule. Saito's career, life and honour rest on the successful and punctual completion of the bridge. In desperation he takes Nicholson out of the 'oven' and invites him to supper in his quarters. He tells Nicholson that if he does not complete the bridge on time he will have to commit suicide. While Saito tries to compromise, Nicholson remains obdurate - his honour is also at stake - a commander must be seen to command. He is returned to his prison.

Meanwhile, Shears reaches a village, where the natives help him. Later, he moves on, down river. Running out of water, he drinks from the river and falls dangerously ill.

Nicholson is finally released from the prison, to cheers from his men. Saito announces a day of rest, in celebration of Japan's victory over Russia on the same day in 1905. The British are jubilant but Saito weeps; he knows Nicholson has won.

The officers undertake to supervise the building and decide that the bridge is in the wrong place, and that the work is not being managed efficiently. Nicholson sees this as an opportunity to demonstrate British superiority and tells Saito that his men will build a completely new bridge.

Shears is now recuperating in an idyllic hospital by the sea, where he is visited by Major Warden, from British Intelligence. Warden plans to destroy the railway and bridge over the River Kwai and wants Shears to join his band of commandos. Shears reminds Warden that he has been impersonating an officer; officially, he doesn't exist. Warden, however, blackmails him into agreement.

Back at Camp 16, some of the British soldiers wonder why they are helping the enemy to build a proper bridge.

Warden and his team of commandos parachute into the jungle. One hits a tree and is killed. With women bearers to carry the equipment, the team begins the journey to the bridge, having now decided to blow up a train as it crosses it.

Nicholson asks his officers to help with the building, so that they can complete on time. He even enlists the help of soldiers in the hospital.

While the commandos rest, they are attacked by Japanese soldiers. Although the attack is successfully fought off, Warden injures his foot and it becomes infected. He orders the team to leave him, but everyone finally gets in sight of the now completed bridge. Nicholson installs a plaque, proclaiming that it was the British who built it. He stands on the bridge and muses on his life, while Saito stands silently by.

Nicholson and his men put on a celebratory show. Meanwhile, Shears and the remaining commandos plant the explosives under the bridge. After the show, Nicholson congratulates his men on their successful completion of the bridge.

The following morning, the river level has dropped dramatically, exposing the wires leading to the explosives. The bridge is officially opened. The British soldiers march over it, whistling, while Nicholson and Clipton await the arrival of the train. Suddenly Nicholson sees one of the wires, and investigates with Saito. Watching from the bank, Shears and Warden cannot understand why Nicholson is wading in the river, but he is following the wire. When one of the commandos knifes Saito, Nicholson completely loses his head. The commando is shot as the Japanese soldiers arrive - and the train.

Shears attempts to kill Nicholson, who comes to his senses and begins to realise what he has done. In a swoon, he falls on the detonator and the bridge explodes and collapses into the river, taking the train with it. Major Clipton surveys the devastation, capable only of crying "madness, madness".