Somewhere in Texas in the year 1858, several male African slaves are being 'driven' by the Speck Brothers, Ace and Dicky. Among the shackled slaves is Django, sold off and separated from his wife, Broomhilda. The Speck Brothers are stopped by Dr. King Schultz, a German dentist and bounty hunter from Düsseldorf. Schultz asks to buy one of the slaves, but while questioning Django about his knowledge of the Brittle Brothers, for whom Schultz is carrying a warrant, he irritates Ace who aims his shotgun at Schultz. Schultz quickly kills Ace and leaves Dicky at the mercy of the other newly freed slaves, who blow his head off. Since Django can identify the Brittle Brothers, Schultz offers Django his freedom in exchange for his help in tracking them down. After executing the Brittles, Django partners with Schultz through the winter and becomes his apprentice. Schultz explains that, being the first person he has ever given freedom to, he feels vaguely responsible for Django and is driven to help him in his quest to rescue Broomhilda.
Django, now fully trained, collects his first bounty, keeping the handbill as a good luck charm. In Mississippi, Schultz uncovers the identity of Broomhilda's owner: Calvin Candie, the charming but brutal owner of the Candyland plantation, where slaves are forced to fight to the death in wrestling matches called "Mandingo fights." Schultz, expecting Candie will demand an exorbitant amount if they are forthright, devises a ruse to purchase one of Candie's prized fighters, purchase Broomhilda on the side for a reasonable sum, then disappear before the deal is finalized. Schultz and Django meet Candie at a club in Greenville and submit their offer. His greed tickled, Candie invites them to Candyland. After he secretly briefs Broomhilda on the plan, Schultz moves to the next step, claiming to be charmed by the German-speaking Broomhilda.
During dinner, Candie's staunchly loyal house slave, Stephen, becomes suspicious. Deducing that Django and Broomhilda know each other and that the sale of the Mandingo fighter is just a misdirection, Stephen alerts Candie, who subsequently extorts the bounty hunters for the complete bid amount. Schultz yields and, after the money is paid and the paperwork signed, Candie demands a formal handshake from Schultz to finalize the deal. Schultz instead shoots him through the heart with a concealed derringer. He apologizes to Django before he is fatally shot by one of Candie's henchmen. In the ensuing gun battle, Django kills many of the remaining henchmen but surrenders once Broomhilda is taken hostage at gunpoint.
The next morning, Django is informed by Stephen that he will be sold to a mine to work for the remainder of his days. En route to the mine, Django proves to his escorts that he is a bounty hunter by showing them the handbill from his first kill. He then convinces them of a very large bounty for a man back at Candyland, of which they would receive the majority, should Django be released. Once Django is uncuffed and given a pistol, he swiftly kills his captors, takes their dynamite, and rides back to Candyland.
Returning to the plantation, Django discovers Schultz's body, takes Broomhilda's freedom papers and says goodbye to his fallen mentor. Django releases Broomhilda from her cell. When Candie's mourners return from his funeral, Django guns down Candie's remaining henchmen. He then kills Candie's sister Lara, releases the house servants, and kneecaps Stephen. As Stephen angrily curses him, Django ignites the dynamite he has planted throughout the mansion. He and Broomhilda watch from a distance as the mansion explodes, killing Stephen, before riding off.