The film begins in 1939 with the German-initiated relocation of Polish Jews from surrounding areas to the Kraków Ghetto shortly after the beginning of World War II. Meanwhile, Oskar Schindler (Liam Neeson), an ethnic German businessman from Moravia, arrives in the city in hopes of making his fortune as a war profiteer. Schindler, a member of the Nazi Party, lavishes bribes upon the Wehrmacht and SS officials in charge of procurement. Sponsored by the military, Schindler acquires a factory for the production of army mess kits. Not knowing much about how to properly run such an enterprise, he gains a close collaborator in Itzhak Stern (Ben Kingsley), an official of Krakow's Judenrat (Jewish Council) who has contacts with the Jewish business community and the black marketers inside the Ghetto. The Jewish businessmen lend Schindler the money for the factory in return for a small share of products produced. Opening the factory, Schindler pleases the Nazis and enjoys his newfound wealth and status as "Herr Direktor", while Stern handles all the administration. Schindler hires Jewish Poles instead of Catholic Poles because they cost less (the workers themselves get nothing; the wages are paid to the SS). Workers in Schindler's factory are allowed outside the ghetto, and Stern falsifies documents to ensure that as many people as possible are deemed "essential" to the German war effort, which saves them from being transported to concentration camps, or being killed.

SS-Lieutenant (Untersturmführer) Amon G?th (Ralph Fiennes) arrives in Kraków to oversee construction of the new P?aszów concentration camp. Once the camp is completed, he orders the final liquidation of the ghetto and Operation Reinhard in Kraków begins, with hundreds of troops emptying the cramped rooms and arbitrarily murdering anyone who protests or appears uncooperative, elderly or infirm. Schindler, watching the massacre from the hills overlooking the area with his mistress, is profoundly affected. He nevertheless is careful to befriend Goeth and, through Stern's attention to bribery, Schindler continues to enjoy SS support and protection. During this time, Schindler bribes Goeth into allowing him to build a sub-camp for his workers, so that he can keep his factory running smoothly and protect them from being randomly executed. As time passes, Schindler acts on information provided by Stern to try and save as many lives as he can. As the war shifts, Goeth receives orders from Berlin commanding him to exhume and destroy the remains of every Jew murdered in the Kraków Ghetto, dismantle P?aszów, and ship the remaining Jews—including Schindler's workers—to the Auschwitz concentration camp.

At first, Schindler prepares to leave Kraków with his fortune. He finds himself unable to do so, however, and prevails upon Goeth to allow him to keep his workers so that he can move them to a factory in his old home of Zwittau-Brinnlitz, in Moravia away from the Final Solution, now fully underway in occupied Poland. Goeth eventually acquiesces, but charges a massive bribe for each worker. Schindler and Stern assemble a list of workers who are to be kept off the trains to Auschwitz.

"Schindler's List" comprises these "skilled" inmates, and for many of those in P?aszów camp, being included means the difference between life and death. Almost all of the people on Schindler's list arrive safely at the new site. The train carrying the Jewish women is accidentally redirected to Auschwitz. The women are taken to what they believe to be the gas chambers; they then weep with joy and immense relief when water falls from the showers. The day after, the women are shown waiting in line for work and being inspected by the camp physician, Dr. Josef Mengele. In the meantime, Schindler rushes immediately to Auschwitz. Intending to rescue all the women, he bribes the camp commander, Rudolf H??, with a cache of diamonds in exchange for releasing the women to Brinnlitz. However, a last minute problem arises just when all the women are boarding the train. Several SS officers attempt to hold back the children and prevent them from leaving. Schindler, however, insists that he needs their hands to polish the narrow insides of artillery shells. As a result, the children are released. Once the women arrive in Zwittau-Brinnlitz, Schindler institutes firm controls on the SS guards assigned to the factory, forbidding them to enter the production areas. He permits and encourages the Jews to observe the Sabbath. In order to keep his factory workers alive, he spends much of his fortune bribing Nazi officials and buying shells from other companies, meaning he never actually produces working shells for the seven months his factory is in business. Later, he surprises his wife while she is in the village church during mass, and tells her that she will now be the only woman in his life, a concession he had refused to grant previously. She goes with him to the factory to assist him. He runs out of money just as the Wehrmacht surrenders, ending the war in Europe.

As a Nazi Party member and a self-described "profiteer of slave labour", in 1945, Schindler must flee the advancing Red Army. Although the SS guards have been ordered to liquidate the Jews of Brinnlitz, Schindler persuades them to return to their families as men, not murderers. In the aftermath, he packs a car in the night and bids farewell to his workers. They give him a letter explaining he is not a criminal to them, together with a ring secretly made from a worker's gold dental bridge and engraved with a Talmudic quotation, "Whoever saves one life saves the world entire." Schindler is touched but deeply ashamed, feeling he could have done more to save many more lives, such as selling his car, and selling his Golden Party Badge could have saved one more. Weeping, he considers how many more lives he could have saved as he leaves with his wife during the night.

The Schindler Jews, having slept outside the factory gates through the night, are awakened by sunlight the next morning. A Soviet dragoon arrives and announces to the Jews that they have been liberated by the Red Army. The Jews walk to a nearby town in search of food.

After a few scenes depicting post-war events and locations, such as the execution of Amon Goeth by hanging for war crimes and a brief summary of what eventually happened to Schindler in his later years, the film returns to the Jews walking to the nearby town. As they walk abreast, the black-and-white frame changes to one in color of present-day Schindler Jews at Schindler's grave site in Jerusalem (where he wanted to be interred).[2] The film ends by showing a procession of now-elderly Jews who worked in Schindler's factory, each of whom reverently sets a stone on his grave—a traditional Jewish custom denoting deep gratitude or thanks to the deceased. The actors portraying the major characters walk hand-in-hand with the people they portrayed, placing their stones as they pass. (Ben Kingsley is accompanied by the widow of Itzhak Stern, who died in 1969.) The audience learns that, at the time of the film's release, there were fewer than 4,000 Jews left alive in Poland, but more than 6,000 descendants of the Schindler Jews throughout the world. In the final scene, Liam Neeson (although his face is not visible) places a pair of roses on the grave and stands contemplatively over it.

The film concludes with a statement, "In memory of the more than six million Jews murdered"; the closing credits begin with a view of a road paved with headstones culled from Jewish cemeteries during the war (as depicted in the film), before fading to black.

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