He is a deluded and misguided British colonel who acts as a head of British POWS in Japanese prison camp that are forced to build a bridge that connects Bangkok to Rangoon through the river Kwai. He prides the construction of the bridge as a historical pride of the British soldiers in term of hard work and ingenuity while failing to realize that he commits treason toward his countrymen by helping the Imperial Japan in their war effort.
In early 1943, British POWs arrive by train at a Japanese prison camp in Burma. The commandant, Colonel Saito, informs them that all prisoners, regardless of rank, are to work on the construction of a railway bridge over the River Kwai that will help connect Bangkok and Rangoon. The senior British officer, Lieutenant Colonel Nicholson, informs Saito that the Geneva Conventions exempt officers from manual labour. Nicholson later forbids any escape attempts because they had been ordered by headquarters to surrender, and escapes could be seen as defiance of orders.
At the morning assembly, Nicholson orders his officers to remain behind when the enlisted men march off to work. Saito threatens to have them shot, but Nicholson refuses to back down. When Major Clipton, the British medical officer, warns Saito there are too many witnesses for him to get away with murder, Saito leaves the officers standing all day in the intense heat. That evening, the officers are placed in a punishment hut, while Nicholson is locked in an iron box.
Meanwhile, three prisoners attempt to escape. Two are shot dead, but United States Navy Lieutenant Commander Shears gets away, although wounded. He wanders half-dead into a Siamese village, where he is nursed back to health before completing his escape downstream and eventually to the British colony of Ceylon.
Meanwhile, the prisoners work as little as possible and sabotage whatever they can. Should Saito fail to meet his deadline, he would be obliged to commit ritual suicide. Desperate, he uses the anniversary of Japan's 1905 victory in the Russo-Japanese War as an excuse to save face and announces a general amnesty, releasing Nicholson and his officers and exempting them from manual labour.
Nicholson is shocked by the poor job being done by his men. Over the protests of some of his officers, he orders Captain Reeves and Major Hughes to design and build a proper bridge, in order to maintain his men's morale and pride in their professionalism. As the Japanese engineers had chosen a poor site, the original construction is abandoned and a new bridge begun downstream.
Shears is enjoying his hospital stay in Ceylon when British Major Warden invites him to join a mission to destroy the bridge before it is useful to Japanese forces. Shears is so appalled he confesses he is not an officer; he impersonated one, expecting better treatment from the Japanese. Warden responds that he already knew and that the American Navy agreed to transfer him to the British to avoid embarrassment. Realising he has no choice, Shears "volunteers".
Meanwhile, Nicholson drives his men hard to complete the bridge on time. For him, its completion will exemplify the ingenuity and hard work of the British Army long after the war's end. When he asks that their Japanese counterparts pitch in as well, a resigned Saito replies that he has already given the order. Nicholson erects a sign commemorating the bridge's construction by the British Army, from February to May 1943.
The four commandos parachute in, though one is killed on landing. Later, Warden is wounded in an encounter with a Japanese patrol and has to be carried on a litter. He, Shears, and Canadian Lieutenant Joyce reach the river in time with the assistance of Siamese women bearers and their village chief, Khun Yai. Under cover of darkness, Shears and Joyce plant explosives on the bridge towers below the water line.
A train carrying important dignitaries and soldiers is scheduled to be the first to cross the bridge the following day, so Warden waits to destroy both. However, by daybreak, the river level has dropped, exposing the wire connecting the explosives to the detonator. Nicholson spots the wire and brings it to Saito's attention. As the train approaches, they hurry down to the riverbank to investigate.
Joyce, manning the detonator, breaks cover and stabs Saito to death. Nicholson yells for help, while attempting to stop Joyce from reaching the detonator. When Joyce is mortally wounded by Japanese fire, Shears swims across the river, but is himself shot. Recognising the dying Shears, Nicholson exclaims, "What have I done?" Warden fires a mortar, wounding Nicholson. The dazed colonel stumbles towards the detonator and collapses on the plunger just in time to blow up the bridge and send the train hurtling into the river below. Witnessing the carnage, Clipton shakes his head, muttering, "Madness! ... Madness!"