Twenty-year-old Will Hunting of South Boston is a self-taught, genius-level intellect, though he works as a janitor at MIT and spends his free time drinking with his friends, Chuckie, Billy, and Morgan. When Professor Gerald Lambeau posts a difficult math problem as a challenge for his graduate students, Will solves the problem anonymously, stunning both the students and Lambeau. As a challenge to the unknown genius, Lambeau posts an even more difficult problem. Will solves the problem, but then flees the scene when Lambeau catches him. At a bar, Will meets Skylar, a British student about to graduate from Harvard, who plans on attending medical school at Stanford.

The next day, as Will and his friends fight a gang at the basketball court, police arrive and arrest Will. Lambeau visits his court appearance and notices Will's intellect in defending himself. He arranges for him to forgo jail time if he agrees to study mathematics under Lambeau's supervision and participate in therapy sessions. Will tentatively agrees, but treats his first few therapists with mockery. In desperation, Lambeau calls on Dr. Sean Maguire, his estranged college roommate, who now teaches psychology at Bunker Hill Community College. Unlike other therapists, Sean actually challenges Will's defense mechanisms, and after a few unproductive sessions, Will begins to open up.

Will is particularly struck by Sean's story of how he met his wife by giving up his ticket to the historic game six of the 1975 World Series, after falling in love at first sight. Sean neither regrets his decision, nor does he regret the final years of his marriage, after which his wife died of cancer. This encourages Will to build a relationship with Skylar, though he lies to her about his past and is reluctant to introduce her to his friends or show her his rundown neighborhood. Will also challenges Sean to take an objective look at his own life, since Sean cannot move on from his wife's death.

Lambeau sets up a number of job interviews for Will, but Will scorns them by sending Chuckie as his "chief negotiator," and by turning down a position at the NSA with a scathing critique of the agency's moral position. Skylar asks Will to move to California with her, but he refuses and tells her he is an orphan, and that his foster father physically abused him. Will breaks up with Skylar and later storms out on Lambeau, dismissing the mathematical research he has been doing. Sean points out that Will is so adept at anticipating future failure in his interpersonal relationships that he deliberately sabotages them in order to avoid emotional pain.

Will walks in on a heated argument between Sean and Lambeau over his potential. Sean and Will share and find out that they were both victims of child abuse. Sean helps Will to see that he is a victim of his own inner demons and to accept that it is not his fault, causing him to break down in tears. Will accepts one of the job offers arranged by Lambeau. Having helped Will overcome his problems, Sean reconciles with Lambeau and takes a sabbatical to travel the world. When Will's friends present him with a rebuilt Chevrolet Nova for his twenty-first birthday, he decides to pass on his job offers and drive to California to reunite with Skylar. Sometime later, Chuckie goes to Will's house to pick him up, only to find that he is not there, much to his happiness. Sean finds a letter from Will in his mailbox, which tells him that Will is going to see Skylar.