is being executed on the bridge. Part 2 builds Farquhar's character for readers. By the end of the first part, readers don't reallycare for Farquhar. We don't have any reason to care for him. We sympathize that he is about to die, but we do figure that he is an enemy combatant, it is war, and his death is nothing new or significant. Part 2 gives readers reason to care for Farquhar. We see that he's married, and that he wants to play a bigger role for the side he supports. What then makes us so sympathetic to his plight is that part 2 lets readers know that Farquhar has been set up through a devious ploy.

The lady had now brought the water, which the soldier drank. He
thanked her ceremoniously, bowed to her husband and rode away. An
hour later, after nightfall, he repassed the plantation, going northward in the direction from which he had come. He was a Federal scout.

Ambrose Bierce's story has a marvelous opening. A reader could hardly stop reading after being captured by the first sentences.

A man stood upon a railroad bridge in northern Alabama, looking down into the swift water twenty feet below. The man's hands were behind his back, the wrists bound with a cord. A rope closely encircled his neck. It was attached to a stout cross-timber above his head and the slack fell to the level of his knees. Some loose boards laid upon the ties supporting the rails of the railway supplied a footing for him and his executioners.

Bierce is able to open his story like this because he postpones the necessary exposition until Part 2, which works like a flashback. In Part 1 the man is waiting to be hanged. In Part 3 he imagines the rope has broken and he is in the surging creek trying to free his hands and escape. But Bierce never describes what the man actually did to get himself into that situation. Part 2 supplies the necessary information to enable the reader to imagine pretty vividly, without being told, what Peyton Farquhar actually did and how he got caught:

"The Yanks are repairing the railroads," said the man, "and are getting ready for another advance. They have reached the Owl Creek bridge, put it in order and built a stockade on the north bank. The commandant has issued an order, which is posted everywhere, declaring that any civilian caught interfering with the railroad, its bridges, tunnels, or trains will be summarily hanged. I saw the order."

The soldier reflected. "I was there a month ago," he replied. "I observed that the flood of last winter had lodged a great quantity of driftwood against the wooden pier at this end of the bridge. It is now dry and would burn like tinder."

Part 2 of "An Occurrence at Owl Creek Bridge" ends with the ominous words,

He was a Federal scout.

We can picture Farquhar riding north, leaving his horse hitched to a tree some distance from the bridge, sneaking up silently in the dark with his matches and kerosene. Everything is perfectly quiet. He reaches the dry driftwood and pours his kerosene, then strikes a match and gets ready to run back to his horse. By the light of his own fire, plus the lights of dozens of suddenly uncovered dark lanterns all focused on him, he sees that he has walked into a trap. He is surrounded by Union soldiers, who are all witnesses to his arson attempt and who will be prepared to hang him tomorrow morning.

None of this is expressed in the text, but it is so obvious that it speaks for itself. There is something a little uncanny about the way Ambrose Bierce creates a sort of fourth-dimensional scene.

In Part 1 of "An Occurrence at Owl Creek Bridge," Peyton Farquhar is waiting to be hanged. In Part 3 he imagines he is in the water struggling to free his hands and try to save his life. Part 2 is like a flashback. Its main purpose is to explain how Farquhar got into his predicament. There is no description of what he actually tried to do at the bridge or how he got caught. The last sentence of Part 2, as well as the sentence preceding it, make the reader visualize--in a flash of insight and understanding--pretty vividly what happened.

An hour later, after nightfall, he repassed the plantation, going northward in the direction from which he had come. He was a Federal scout.

We can imagine how Farquhar collected some flammables, rode to a spot near the bridge, crept up quietly in the dark, poured some kerosene on the accumulated driftwood, then started a small blaze--and found he had run into a big waiting contingent of the Union Army. Suddenly the scene was lighted, not only by his fire, but by lamps of a dozen soldiers in blue uniforms. There was no escape. Farquhar was surrounded. He had been caught red-handed committing sabotage in front of countless eye-witnesses. 

Ambrose Bierce does not have to describe this scene, because we can see it for ourselves, and we can also share Farquhar's feelings when he realizes he has been set up and trapped. He knows what to expect because the federal scout told him in Part 2:

The commandant has issued an order, which is posted everywhere, declaring that any civilian caught interfering with the railroad, its bridges, tunnels, or trains will be summarily hanged.

By "summarily hanged" the commandant means "immediately hanged without trial." They have only waited for daylight to carry out the order. 

The significance is that it shows how Peyton Fahrquhar was being set up from the very beginning.  At the start of part 2, the reader is told that Peyton is a strong southern sympathizer.  He owns a plantation, has slaves, and is fairly wealthy.  It also says that Peyton wanted to join up with the southern army, but was prevented by some unstated reason.  The text says that he "chafed" at not being allowed to fight and "longed for release of his energies."  Peyton wants to fight the Union.  

The Union scout (posing as a southern soldier) mentioned enough tempting details to Peyton about the Union army at Owl Creek Bridge that Peyton begins formulating a plan to sneak to it and burn it down.  It would have been a good plan had the soldier actually been a southern soldier, but since he was a Union scout and returning to the bridge, the scout likely had everybody on alert to expect Peyton's sabotage. It's a tough last sentence because what it means is that Peyton was doomed from the start. 

"An Occurrence at Owl Breek Bridge" is set during the American Civil War, when the North and South fought over many things, but most importantly, slavery.  The main character of the story, Peyton Farquhar, is described as "a well-to-do planter, of an old and highly respected Alabama family" and a slave owner.  Politically-speaking, then, he sides with the South in their wanting to keep slavery as an economic right.  The South wanted to secede, or split, from the rest of the country and create their own country, which is why they had their own President for a time, Jefferson Davis.  In the context of this story, Farquhar is a proud Southern plantation owner who has devoted himself to their cause from the beginning.  This information is important to the story because it is this fervor for the Southern cause that persuades him to attempt to blow up the Owl Creek Bridge, which he was tricked into doing by a Federal scout (mentioned in the last sentence of Part II); the Federal scout is on the Northern side, but he was dressed in grey, which was the uniform of the Confederates (the South).

The second part of this story provides the expository, or background, information that we need to understand who Peyton Farquhar is and why he is being hanged.  We learn of his background and beliefs, that he's a staunch secessionist (meaning that he wanted the southern states to leave the Union around the time of the Civil War) and that he is "ardently devoted to the Southern cause," i.e. willing to do whatever he can to help the Confederacy win the war against the North. 

The narrator tells a story about a Federal scout, dressed as a Confederate soldier, who stopped at Farquhar's plantation and visited with him and his wife.  The soldier tells Farquhar that the Yankees are punishing anyone who interferes with railways or bridges severely, and such a fact conveys to Farquhar just how damaging an attack on these would be.  The soldier further entices him to attempt such an attack with a description of all the wood that had been pushed up against the Owl Creek Bridge during a recent flood, and how quickly that wood would burn.  We can now understand that this is the crime for which Farquhar is being hanged.

First, let's talk about how the story is actually structured.  It's divided into three parts. The first part describes the setting and protagonist. A planter from Alabama is about to be hanged from a bridge that spans a rushing creek. He stands on one end of a plank, and a sergeant in the Union army stands on the plank's other end. The planter feels as though time is slowing down, and the sergeant steps aside, off of the plank.

Part II tells us about the protagonist, Peyton Farquhar, in much greater detail. He is ardently devoted to the Southern cause in the Civil War. He is so devoted, in fact, that when a man dressed as a Confederate soldier appeared at his gate one day in the not too distant past, he heard the soldier's declaration that anyone who disrupted the railways would seriously damage the North's war effort with great interest.  The punishment for interfering with the bridges and railroads is death. The soldier even described how one might go about setting fire to the Owl Creek Bridge, not too far from Farquhar's plantation. At the end of this section, we learn something Farquhar didn't know: that soldier was really a Federal scout.

Part III describes Farquhar's apparent escape from death when the rope breaks and he falls into the water. He swims amid a hail of gunshots. He walks for many hours through the forest. His thoughts seem to travel "with the rapidity of lightning" during this time. When he finally reaches his home and is about to clasp his wife in his arms, the noose snatches him back and breaks his spine. Farquhar is dead, and his body swings from the Owl Creek Bridge.

The structure, then, makes this story so worthy a piece of literature because of how masterfully each part is executed.  Bierce gives readers enough clues to guess at what is happening: Farquhar felt time slow down at the end of Part I; Part II gives us the backstory and explains just how he ended up being hanged in the first place; and Part III contains enough clues for us to understand that what's happening isn't quite right. Farquhar sees details and has experiences that no living person could, and yet, as this section continues (it is the longest of the three parts), we can get a little lost in the story. It's almost as though the exposition introduced in Part II combined with the detail and length of Part III separates us enough from the facts of Part I that we actually begin to believe that Farquhar could have escaped. Thus, it comes as something of a shock—despite the many clues we've had—when his neck snaps. We realize that the entirety of Part III, up until the last paragraph, took place in Farquhar's head, from the moment the sergeant stepped off the plank and he began to fall until the moment the rope stretched taut and his neck snapped.  Bierce uses this structure to surprise us but, perhaps, also to humanize a group that is often vilified: Civil War-era Southerners. In a way, we cannot help but care about Farquhar's fate because we begin to empathize with him. Our shock at his death—and, perhaps, at our own sympathy for him—help show how the structure of this text makes it a worthy work of literature.

In works of literature, the “plot” of a work is sometimes very different from the chronology of events in the story-line.  John Milton’s Paradise Lost, for instance, opens with Satan in hell, after he has fallen; the poem then moves to describe God in heaven, looking down at Satan; it then moves to depicting Satan in the Garden of Eden, observing Adam and Eve.  In Books 5 and 6, however, there is a very substantial “flashback” describing events in heaven before Satan’s fall.  Thus, the “plot” or “structural design” of the poem is not at all the same as its chronology. 

The same thing is true in Ambrose Bierce’s story “An Occurrence at Owl Creek Bride.” Indeed, in that work the distinction between plot and chronology is, if anything, even more important. Bierce’s story opens by describing a man, Peyton Farquhar, standing on a bridge, with a noose about his neck, who is about to be hanged. The story then “flashes back,” in a long section describing how Farquhar came to deserve hanging; then the story describes the hanging but also describes how the hanging apparently fails and how Farquhar seems to be escaping and making his way back home; finally, in the final sentence of the story, we learn that the dramatic escape has been merely a figment of Farquhar’s desperate imagination:

Peyton Farquhar was dead; his body, with a broken neck, swung gently from side to side beneath the timbers of the Owl Creek bridge.

This sentence almost literally yanks us back to the very moment, earlier in the story, when Farquhar seemed to be (and, as it turns out, was indeed) hanged.

“Plot,” then, is exceptionally important in Bierce’s story. Without Bierce's manipulation of the chronology of the story, and particularly without the abrupt shift from apparent present to real present, the story would lack much of its punch and most of its appeal. Bierce “tricks” the reader at the end of the story, but the power and suspense of the third section of the story depend precisely on that trick. Indeed, there would have been no way to tell this story – and certainly no point in telling it – without Bierce’s clever manipulation of plot. In is in the manipulation of the plot that much of the artistry of the story lies.

Something extra: During the period in which Bierce wrote this story, “trick endings” were not uncommon and in fact had become (paradoxically) almost expected as a feature of popular short stories. Bierce, however, manages to pull off his trick with unsurpassed skill, even scattering clues throughout the story that a trick is taking place. Thus, when one reads the story a second time, one also sees exactly where and how one was deceived – a fact that makes one’s appreciation of Bierce’s artistry all the greater. Bierce is less interested in the trick itself than in fully exploring the psychology of Farquhar in his last split second of life. Bierce takes that split second and expands and expands it so that it consumes half the story and all the reader’s attention. Thus, the story is an exploration not only of Farquhar's psychology but also of the psychology of the reader.

This is a story that lends itself very well to interpretation from the perspective of Stanley's Fish's "affective criticism," which emphasizes that a story is not an "object" (like a painting) but rather a processs (like a piece of music).

(For different ways of viewing the story, see first link below.)