The film begins with the arrival of career criminal Randle McMurphy at a mental institution in Oregon in 1963. McMurphy does not want to get get sent back to doing hard time in a prison as punishment for statutory rape and sexual assault, so he has successfully conned the court system into believing that he is mentally ill, in order to get refuge in what he believes will be the less hostile environment of the mental institution.
McMurphy quickly puts his charm to effective use among the patients, who find an exciting and offbeat addition to their ward. Of course, with charm McMurphy brings an element of chaos into their strictly regimented lives. The free-spirited goofball wastes no time in insinuating himself into the social order of the patients, which has been strictly controlled by their, Nurse Ratched. Ratched arranges things to ensure that the patients are totally dependent on her.
McMurphy soon realizes not all “nutjobs” are alike. The ward is essentially divided between the Chronics, who suffer so deeply that they are unlikely to ever see the outside world again, and the Acutes, who can potentially be treated and released into society as functioning adults again.
McMurphy’s alienation from the outside world and rebellion against the existing power structure in the ward is expressed through his almost feverish desire to use the TV in the common room to watch a World Series game. While Ratched disapproves of the idea, she consents to putting it to a vote. The vote itself becomes a battle of wills, as McMurphy fails to garner the necessary number of votes needed to change the policy. McMurphy is so incensed by the lack of support for the idea that he late shoots water at the other patients from a heavy fountain sunk into the floor, ruining their card game. He then bets them that he can lift the heavy ceramic fountain from its place on the floor, but is humiliated when it proves impossible.
Stimulated by McMurphy’s rebellious spirit, a patient named Cheswick reacts to Nurse Ratched’s cruel treatment of a young stutterer named Billy by suggesting another vote be held to watch that day’s World Series game. When it seems like the patients have voted to watch the game, McMurphy is overjoyed. However, Nurse Ratched brings him down quickly by pointing out that he did not get the votes of the Chronics, and therefore they will not be able to watch the game. McMurphy is outraged at this, because the Chronics are not even aware of where they are, much less of the vote that is taking place around them. Finally, he convinces an enormous mute Indian nicknamed “Chief” Bromden to silently raise his hand. Nevertheless, the decision stands as Nurse Ratched declares the Chief’s vote null and void, since it took place after the voting had closed. Nurse Ratched is satisfied with her display of power, maintaining her long-held position as head of a totalitarian regime. But she is undermined once again when McMurphy decides to invent an imaginary game and become the TV announcer himself, much to the delight of the other patients.
McMurphy is shocked to learn that many of the patients around him have committed themselves to the facility by choice. He questions the patients as to why they do not just leave whenever they desire. McMurphy's discovery intensifies his resentment of Nurse Ratched, since he sees her as coercing them into staying in order to broaden her own sense of power and control. During group therapy, Ratched exhibits a masterful talent for zeroing in on the most vulnerable emotional flashpoint that has driven each man into the hospital and exploits it for the sake of bullying them as a means of establishing dominance.
McMurphy undermines Ratched further when he steals a hospital bus and takes some of the patients out for a fishing expedition. They also bring along a friend of McMurphy’s named Candy. The stuttering Billy Bibbit is attracted to her. Later, during a basketball game between patients and orderlies, McMurphy learns the price of his rebellion: he has been confined indefinitely to the ward, and will not be released in 68 days as he thought.
When a fight breaks out and McMurphy attacks the orderly who told him this news, he is ordered to undergo shock treatment therapy. While waiting to enter the shock treatment room McMurphy learns that Chief Bromden has only been pretending to be mute and deaf, and that in fact he can hear and speak. After reentering the ward, McMurphy appears to be catatonic, but soon reveals that he is putting on his blank expression, and that the shock therapy has not diminished his rebellious spirit.
McMurphy bribes the orderlies to allow Candy and another girl to bring booze to the ward for a late-night party. He also arranges for Candy to take Billy's virginity. Nurse Ratched arrives the next morning to find Billy and Candy naked together and threatens to tell Billy's mother, who she reveals is her friend. This proposition is too much to bear for Billy and he kills himself. The sight of the bloodied innocent Billy lying crumpled and lifeless finally pushes McMurphy over the edge. He grabs Nurse Ratched's neck and attempts to strangle her. The orderlies subdue McMurphy.
The next time we see the ward, it is back to the way it was before McMurphy arrived, only now Nurse Ratched wears a neck brace. Later that night the Chief is lying awake in bed when McMurphy finally returns from his mysterious absence. The Chief goes to his bed and discovers McMurphy has been lobotomized. The Chief, unable to bear the thought of the spirited McMurphy living out the rest of his life in this state, smothers him with a pillow.
He then goes over to the big ceramic fountain that McMurphy failed to budge earlier and pulls it out of the floor. Tossing it through the window, breaking the glass and smashing open the metal protective bars, the Chief flies away from the cuckoo’s nest, to the excited cheers of the one patient who witnessed it happen.
