In Kraków during World War II, the Nazis force local Polish Jews into the overcrowded Kraków Ghetto. Oskar Schindler, a German member of the Nazi Party from Czechoslovakia, arrives in the city, hoping to make his fortune. He bribes Wehrmacht (German armed forces) and SS officials, acquiring a factory to produce enamelware. Schindler hires Itzhak Stern, a Jewish official with contacts among black marketeers and the Jewish business community; he handles administration and helps Schindler arrange financing. Stern ensures that as many Jewish workers as possible are deemed essential to the German war effort to prevent them from being taken by the SS to concentration camps or killed. Meanwhile, Schindler maintains friendly relations with the Nazis and enjoys wealth and status as "Herr Direktor".

SS-Untersturmführer (second lieutenant) Amon Göth arrives in Kraków to oversee construction of the Płaszów concentration camp. When the camp is ready, he orders the ghetto liquidated: two thousand Jews are transported to Płaszów, and two thousand others are killed in the streets by the SS. Schindler witnesses the massacre and is profoundly affected. He particularly notices a young girl in a red coat who hides from the Nazis and later sees her body on a wagonload of corpses. Schindler is careful to maintain his friendship with Göth and continues to enjoy SS support, mostly through bribery. Göth brutalizes his Jewish maid Helen Hirsch and randomly shoots people from the balcony of his villa; the prisoners are in constant fear for their lives. As time passes, Schindler's focus shifts from making money to trying to save as many lives as possible. To better protect his workers, Schindler bribes Göth into allowing him to build a sub-camp.

As the Germans begin losing the war, Göth is ordered to ship the remaining Jews at Płaszów to Auschwitz concentration camp. Schindler asks Göth for permission to move his workers to a munitions factory he plans to build in Brünnlitz near his home town of Zwittau. Göth reluctantly agrees, but charges a huge bribe. Schindler and Stern create "Schindler's List" – a list of 850 people to be transferred to Brünnlitz instead of Auschwitz.

As the Jewish workers are transported by train to Brünnlitz, the women and girls are mistakenly redirected to Auschwitz-Birkenau; Schindler bribes Rudolf Höss, commandant of Auschwitz, for their release. At the new factory, Schindler forbids the SS guards from entering the factory floor without permission and encourages the Jews to observe the Jewish Sabbath. Over the next seven months, he spends his fortune bribing Nazi officials and buying shell casings from other companies. Due to Schindler's machinations, the factory does not produce any usable armaments. Schindler runs out of money in 1945, just as Germany surrenders.

As a Nazi Party member and war profiteer, Schindler must flee the advancing Red Army to avoid capture. The SS guards in Schindler's factory have been ordered to kill the Jewish workforce, but Schindler persuades them to "return to [their] families as men, instead of murderers". Bidding farewell to his workers, he prepares to head west, hoping to surrender to the Americans. The workers give him a signed statement attesting to his role in saving Jewish lives and present him with a ring engraved with a Talmudic quotation: "Whoever saves one life saves the world entire". Schindler breaks down in tears, feeling he should have done more, and is comforted by the workers before he an