Shane has sixteen chapters falling into three five-chapter parts and an epilogue. In chapter 1, Shane rides into a Wyoming valley and meets the Starretts. In chapter 6, Chris is introduced. In chapter 11, Stark Wilson enters.

Bob Starrett, the narrator, observes Shane riding one summer afternoon into the valley where the Starretts have a farm and small herd of cattle near a town dominated by Luke Fletcher and his rowdy ranch hands. Shane courteously asks for water but is persuaded by Joe Starrett, Bob’s husky father, to share supper prepared by Marian, Joe’s hospitable wife, and remain overnight. Next day, when a peddler delivers a cultivator and seeks to overcharge Joe, Shane quotes the correct price and coldly faces down the irate peddler. Joe and Shane then have an epic battle with the stump of an enormous tree. Watching fascinated, Marian lets her apple pie burn. Accepting Joe’s job offer, Shane performs many chores with fierce, smooth energy but remains apart. One day when Bob is playing with a broken pistol, Shane demonstrates his skill with his own revolver; he defines a gun as only a tool, good or bad like its owner.

Luke Fletcher returns from Washington, D.C., having wangled an Indian reservation beef contract. He spreads the word that he now requires the whole range and plans to buy the land or scare the farmers off it. Worried neighbors meet at Joe’s house for his advice. Shane takes a broken forklift to town for repair, and he is insulted at the saloon by Chris, a nice but reckless Fletcher hand. Shane quietly buys some soda pop for Bob and walks away. Fletcher’s men rile the farmers so much that Shane feels impelled to seek out Chris and offer him some pop. Chris misses this chance to make amends but instead attacks Shane, who deftly breaks his arm. Beseeched to remain, Shane praises Marian and assures her of the Starretts’ safety. Autumn comes, and one Saturday in town while Bob’s teacher is talking with his parents, Shane is attacked by four of Fletcher’s men. He almost outmatches them, flooring two, but he is held by a third and pummeled by a fourth. Joe rushes in, hurls one attacker away, and watches as Shane demolishes the other. Joe senses that Marian is aware of Shane’s alluring invincibility but will stand by her husband.

Fletcher imports Stark Wilson, a flashy professional killer. Acting on Fletcher’s information, Wilson locates Ernie Wright, an irascible farmer, and insults him. When Wright clumsily draws a gun, Wilson easily shoots him down. Shane is disgusted that the neighbors did not instantly inform him of Wilson’s arrival, since he might have prevented this “legal” murder. The other farmers grow terrified.

As Shane predicts, Fletcher and Wilson next turn on Joe, whom Fletcher offers to make his foreman and gives until evening to answer. Wilson drawls out an off-color remark about Marian. Shane steps between Wilson and Joe to prevent the latter’s certain death. Shane also knows that if Joe goes into town to reject Fletcher’s offer, Wilson will kill him. Shane knocks Joe unconscious, assures Marian that what he is doing is not for her alone but also for her family, packs for his departure, and dresses for battle. Telling Bob to love his valley and to grow straight and clean, he rides into town, finds Wilson in the saloon, and tells him his killing days are over. The two exchange fast gunplay, Wilson dies, and Shane sustains an abdominal wound. When Fletcher tries to shoot him from the saloon balcony, Shane whirls and kills him too. Shane rides into the night, gone forever. Learning the outcome, Joe welcomes Chris, mending and wiser now, as his new hired hand. Bob agrees with his mother: Shane will always be a precious part of their lives.