In 1898, Daniel Plainview finds silver while prospecting in New Mexico but breaks his leg. Dragging himself from the pit, he takes a sample to an assay office and receives a silver and gold claim. In 1902, he discovers oil near Los Angeles and establishes a drilling company. Following the death of a worker in an accident, Daniel adopts the man's orphaned son. The boy, H.W., becomes his nominal business partner, allowing Daniel to present himself to potential investors as a family man.

In 1911, Daniel is approached by Paul Sunday, a young man who tells him of an oil deposit under his family's property in Little Boston, California. Daniel visits the Sundays' property and meets Paul's identical twin brother Eli, who is a local preacher. Daniel attempts to purchase the farm from the Sundays at a bargain price under the ruse of using it to hunt quail, but his motives are questioned by Eli who knows the land has drilling potential. In exchange for the rights to the property, Eli demands $10,000 for his church. An agreement is made and Daniel acquires all the available land in and around the Sunday property, save for one holdout, William Bandy, after he neglected to negotiate with him.

Eli asks for permission to bless the well before drilling begins; Daniel initially agrees, but then refuses to allow it when the time comes. Oil drilling begins and a series of misfortunes occur: an accident kills one worker and a gas blowout deafens H.W. and destroys the drilling infrastructure. Eli blames the disasters on the well not having been properly blessed. When Eli publicly demands the money still owed to him, Daniel beats and humiliates him. At the dinner table that night, Eli attacks and berates his father for having trusted Daniel.

A man arrives at Daniel's doorstep claiming to be his half-brother, Henry. Daniel hires him and the two grow close. A jealous H.W. sets fire to their house, intending to kill Henry. Daniel sends H.W. away to a school for the deaf in San Francisco. A representative from Standard Oil offers to buy out Daniel's local interests, but, after a perceived slight, Daniel refuses and instead strikes a deal with Union Oil to build a pipeline to the California coast. However, Bandy's ranch remains an impediment.

Reminiscing about their childhood home, Daniel becomes suspicious of Henry's story and confronts him one night at gunpoint. "Henry" confesses that he was a friend of the real Henry, who had in fact died of tuberculosis, and that he had impersonated Henry in the hope that Daniel could give him a job. In a fit of rage, Daniel murders the impostor and buries his body. Daniel then drinks heavily and weeps.

The next morning, Daniel is awakened by Bandy, who knows of Daniel's crime and wants Daniel to publicly repent in Eli's church in exchange for being given an easement for the pipeline running across his land. As part of his baptism, Eli humiliates Daniel and coerces him into confessing that he had abandoned his son. Some time later, while the pipeline is being built, H.W. is reunited with Daniel, and Eli leaves Little Boston to go do missionary work.