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In a desolate ghost town during the American Civil War, bandit Tuco Benedicto Pacifico Juan Maria Ramirez ("The Ugly," Eli Wallach) narrowly shoots his way past three bounty hunters to freedom, killing two but only wounding the third. Miles away, Angel Eyes ("The Bad," Lee Van Cleef) interrogates a former soldier called Stevens (Antonio Casas) about a missing man named Jackson who has taken on the name "Bill Carson" (Antonio Casale) and a cache of stolen Confederate gold, brutally killing Stevens and his eldest son after the interrogation but not before Stevens pays Angel Eyes to kill Angel Eyes' employer, another former soldier named Baker; Angel Eyes later collects his fee for Stevens' killing from his employer and then shoots him.
Meanwhile, during Tuco's flight across the desert he runs into a group of bounty hunters who prepare to capture him when they are approached by Blondie ("The Good," Clint Eastwood), a mysterious lone gunman who challenges the hunters to the draw, which he wins with lightning speed. Initially elated, Tuco is outraged and enraged when Blondie delivers him up to the local authorities for the reward money of $2,000. Hours later, as Tuco awaits his execution, Blondie surprises the authorities and frees Tuco by shooting the execution rope, the two later meeting to split the reward money, revealing their lucrative money-making scheme. After Tuco's bounty is raised to $3,000, the two repeat the process at another town before Blondie, weary of Tuco's incessant complaints, abandons him in the desert (keeping all of the money). A livid Tuco manages to make it to another town and rearm himself. Some time later In another town, Tuco surprises Blondie in his hotel room in the middle of a skirmish between Union and Confederate troops. As Tuco prepares to kill Blondie by fashioning a noose and forcing Blondie to put it around his neck, a cannonball hits the hotel and demolishes the room, allowing Blondie to escape.
Following a relentless search, Tuco captures Blondie using the same scheme with another partner (Tuco doesn't allow Blondie to shoot the rope this time and the unfortunate "Shorty" is hanged) and marches him across the harsh desert. When Blondie finally collapses from dehydration and heatstroke, Tuco prepares to kill him but pauses when a runaway ambulance carriage appears on the horizon heading their way. Inside, while looting the dead soldiers, Tuco discovers a dying Bill Carson, who reveals that $200,000 in stolen Confederate gold is buried in a grave in Sad Hill cemetery but falls unconscious before naming the grave. When Tuco returns with water, he discovers Carson dead and Blondie slumped against the carriage beside Carson's body. Before passing out, Blondie says that he knows the name on the grave. Tuco takes Blondie (both disguised as Confederate soldiers) to a Catholic mission run by Tuco's older brother Father Pablo, allowing Blondie time to recover before the two leave, still disguised. They inadvertently encounter a force of Union soldiers (who they take for Confederates due to thick coatings of grey dust on their uniforms). They are captured and marched to a Union prison camp.
At the camp, Corporal Wallace (Mario Brega) calls the roll. Tuco answers for Bill Carson, catching the attention of Angel Eyes, now disguised as a Union Sergeant stationed at the camp. Angel Eyes has Wallace torture Tuco into revealing Sad Hill Cemetery as the location of the gold, but Tuco also confesses that only Blondie knows the name on the grave. Angel Eyes offers Blondie an equal partnership in recovering the gold. Blondie agrees and rides out with Angel Eyes and his posse. Meanwhile, Tuco, chained to Corporal Wallace, is transported by train to his execution. During the trip, Tuco tells Wallace he has to pee and distracts Wallace long enough to jump off the train, dragging the Corporal with him. He then beats Wallace's head on a rock, killing him, and uses another train to cut their chain, freeing him.
We next see Blondie, Angel Eyes and Angel Eyes' gang arriving in a town that's rapidly being evacuated due to heavy artillery fire. Tuco, wandering aimlessly through the wreckage of that same town, is oblivious of the bounty hunter that survived at the start of the movie (Al Mulock), who tracks and ambushes Tuco. Despite the surprise, Tuco kills the bounty hunter. Blondie investigates the gunshot, finding Tuco and informing him of Angel Eyes's involvement. The two resume their old partnership, stalking through the wrecked town and killing Angel Eyes' henchmen before discovering that Angel Eyes has escaped.
The Mexican stand-off scene at Sad Hill Cemetery.Tuco and Blondie find their way to Sad Hill Cemetery is blocked by large Union and Confederate forces, who are separated only by a narrow bridge. They are preparing to fight for it, but apparently both sides have been ordered not to destroy the bridge. Reasoning that if the bridge were destroyed "these idiots would go somewhere else to fight", Blondie and Tuco wire the bridge with dynamite. During the process, the two trade information, Tuco revealing Sad Hill Cemetery as the gold's location and Blondie saying that the name on the grave is Arch Stanton. The two then take cover as the bridge blows up and the two armies resume their battle. The next morning, the Confederate and Union soldiers have gone. Tuco abandons Blondie (who has stopped to tend to a dying young Confederate soldier) to retrieve the gold for himself at the cemetery. Frantically searching the sea of make-shift tombstones and grave markers, Tuco finally locates Arch Stanton's grave. As he digs, Blondie appears (now clad in his trademark poncho) and tosses him a shovel. A second later, the two are surprised by Angel Eyes, who holds them at gunpoint. Blondie kicks open Stanton's grave to reveal just a skeleton. Declaring that only he knows the real name of the grave, Blondie writes it on a rock in the middle of the graveyard and tells Tuco and Angel Eyes that "two hundred thousand dollars is a lot of money. We're going to have to earn it."
The three stare each other down in the circular center of the cemetery, calculating alliances and dangers in a famous five-minute Mexican standoff before suddenly drawing. Blondie shoots Angel Eyes, who rolls into an open grave, while Tuco discovers that Blondie had unloaded his gun the night before. Blondie directs Tuco to the grave marked "Unknown" next to Arch Stanton's. Tuco digs and is overjoyed to find bags of gold inside, but is shocked when he turns to Blondie and finds himself staring at a noose. Seeking a measure of revenge for what Tuco has done to him, Blondie forces Tuco to stand atop a tottery grave marker and fixes the noose around his neck, binding Tuco's hands before riding off with his share of the gold. As Tuco screams for mercy, Blondie's silhouette returns on the horizon, aiming a rifle at him. Blondie fires a single shot and severs the noose rope, dropping Tuco face-first onto his share of the gold. Blondie smiles as Tuco screams at him in rage and then rides off.