Katherine "Katy" McLaughlin (Alison Lohman) has big dreams of administering her father's Wyoming horse ranch one day, but her father, Rob (Tim McGraw), has other plans. He is currently grooming her older brother, Howard (Ryan Kwanten), to take over the ranch and sends Katy away to an exclusive private school where she constantly feels like a misfit. Being a similar, independent spirit to Katy, Rob has a hard time understanding his daughter as she continually defies his authority to follow her own path. When she comes home for the summer, Katy is met with her father's disapproval because she did not finish a writing assignment at school, but is happily greeted by her mother, Nell (Maria Bello), and Howard. As much as Katy wants to run the ranch, Howard does not, and instead longs to attend college. One day while out riding, Katy finds a wild mustang, and feels an instant connection with the horse. She sets off to tame the mare, which she names "Flicka", despite Rob's protests that he does not want a mustang near his horses.
Later on, Flicka is captured by Katy during a roundup. Rob still does not want a wild horse running amongst the saddle horses and asks Katy not to go near Flicka. Determined to prove she can run the ranch just as well as Howard, Katy defies Rob and starts training the mare at night. Flicka slowly warms to Katy and the two develop a close bond. When Rob finds out, he sells Flicka to the rodeo, leaving Katy devastated. Both Nell and Howard are furious at Rob about making the decision without including them. Seeing his sister heartbroken over losing her beloved horse, Howard finally stands up to his father and says that he does not want the ranch. The family becomes even more divided when Rob refuses to take Flicka back. Howard and Nell refuse to help Rob with the ranch, which he is now considering selling since Howard does not want it. Meanwhile, isolated in her room, Katy starts writing about Flicka to try and escape her pain.
At the rodeo, Howard and Katy (disguised as a cowboy) enter the competition that Flicka is being used in, hoping to get the horse back. Not realizing who she is at first, the frightened mare runs from Katy until the girl calls her name. Rob, however, catches onto his daughter's plan and tries to intervene. Katy freezes at the sight of her father, but Howard boosts his sister onto the mare's back and lets the two escape. Riding Flicka, Katy becomes lost in the mountains, and allows Flicka, who knows the terrain, to make her way towards the ranch. Back at the rodeo, the family reconciles and begins searching for Katy as a fierce thunderstorm moves in. As they near the ranch, Katy and Flicka are attacked by a mountain lion. The mare bolts, throwing Katy to the ground and the cat goes to attack her. Flicka protects Katy, but is badly wounded. The girl binds the mare's wounds and refuses to leave her. Already cold and wet, Katy quickly develops a high fever. After hours of searching, Rob finds the two and brings a delirious Katy back to the house. As her fever spikes dangerously high, Katy calls for Flicka as Nell tends to her. Rob thinks Flicka is mortally wounded and believes she should be put down, though fellow ranchers disagree. Overhearing the argument, a dazed Katy stumbles into the room and gives her father permission to "shoot us now."
Heartbroken by her words, Rob goes outside and begins to cry as he finally understands his daughter's feelings and her pain. Later, a gunshot is heard and Katy bursts into tears, thinking Flicka is dead. The next morning, Nell finds Rob walking back to the house, supporting the injured Flicka. She runs outside to help and finds out that the gunshot was him shooting at the mountain lion. Both are stunned that the mare is still alive and decide not to put her down. Katy's fever breaks and over the next couple of days, she begins to recover. As he watches over his daughter, Rob finds the story that Katy had been writing about Flicka and begins reading it, eventually typing the story and sending it to the school so that Katy can pass for the year. When Katy wakes from the fever, she and Rob reconcile and he takes her to see Flicka, whom Katy is shocked to see is alive. Rob also apologizes to Howard and gives his son his blessing. Thrilled, Howard begins preparing for college. As a family, they decide to not sell the ranch, making it both a working ranch and a refuge for wild mustangs. The film ends with Katy riding Flicka across the beautiful Wyoming landscape.