African-American history teacher Joe Clark (Morgan Freeman) instructs enthusiastic teenagers at Eastside High School in 1967 Paterson, New Jersey. His class is interrupted by fellow African-American teacher Frank Napier (Robert Guillaume), who alerts Joe that their union is holding a meeting without them. Joe interrupts the meeting and demands to know what is going on. Other union members criticize Joe's antics and reveal that they have accepted a raise and agreed to transfer Joe to another school.Twenty years later in present day 1987, Eastside High has devolved into crime-ridden chaos. Dr. Frank Napier, now the Superintendent of Paterson's school district, tells Mayor Don Bottman (Alan North) that a new bill has just passed requiring schools to achieve a 75% passing grade on a basic skills test administered to all students. If a school does not pass, the state of New Jersey will take it over. Frank informs Bottman that only 38% of Eastside's students passed the test the previous year, and suggests Joe Clark take over as the new principal. Although Bottman is wary of the idea, he approves, and Frank visits Joe at the elementary school where he works. Despite Joe's initial resistance, Frank persuades him to take the job, insisting this is Joe's chance to make a difference in the world.On his first day at Eastside, Joe immediately shows his tyrannical side when she shouts at the department heads for no reason, demands that nobody speak during the meetings he holds, and requests the names of every hoodlum, drug dealer, misfit and miscreant in the student body by noon. At an all-school assembly, the troublemakers whose names were submitted are called to the stage. Joe addresses the rowdy crowd, who finally take notice when he expels the 300 students onstage and they are ushered out by security. Joe tells the remaining students they could be expelled just as easily should they go down that same path, and informs them that a practice exam for the basic skills test will be administered in two weeks. They have 110 days before the actual test, and he warns that their futures will depend on it.Parents call an emergency meeting that night. Leona Barrett (Lynne Thigpen), a local community activist whose trouble-making son was one of those expelled that morning, accuses Joe of denying deserving kids an education. Joe stands by his decision, preaching about the responsibility he feels in his new position, and many of the parents applaud him. Leona angrily leaves and vows to destroy Joe.The next morning, a freshman named Thomas Sams (Jermaine Hopkins), who was one of the many troublemakers expelled for skipping class and smoking crack cocaine, pleads with Joe to let him return, claiming he was accused of crimes he did not commit. But Joe does not believe him, and he drags Sams up to the roof of the school where he viciously scolds him about the dangers of narcotics. Joe then dares Sams to commit suicide, but Sams, completely "scared straight", refuses. Joe reluctantly allows the boy another chance, promising to follow his every move throughout the semester.At Joe's insistence, the school's graffiti-covered walls are repainted, and the cages surrounding the food counter in the cafeteria are removed. At lunch, Joe stops Thomas from stealing another student's food, then humiliates him by demanding he and his friends sing the school song while everyone else remains silent. The boys do not know the song, and Joe announces a new rule that every student must learn the song and be prepared to sing it on command. Joe goes to the classroom of Mrs. Elliott (Robin Bartlett), the chorus teacher, to inform her that she must teach the song to the entire student body. When she refuses to interrupt the song her students are singing, Joe summons her into the hall and fires her for insubordination. He later suspends Mr. Darnell (Michael Beach), an English teacher and assistant football coach, for disrespecting him in the cafeteria, and Ms. Joan Levias (Beverly Todd), the vice principal, warns Joe that he has caused chaos.After the practice exam is administered, Joe demands Levias track down the results when they do not arrive soon enough. Two students alert him that a fight has broken out and he runs to the scene. There, Joe finds a drug dealer, one of the students he expelled, attacking a student named Kid Ray (Alex Romaguera). Learning that the drug dealer snuck in through a side door, Joe demands that security chain all the side entrances closed due to insufficient funds to purchase security doors, despite fire codes.Later, Joe sees Kaneesha Carter (Karen Malina White), a student he taught in elementary school, stewing in the hallway outside his office. When he asks Kaneesha what is wrong, she reveals that her mother has kicked her out of the house. Joe and Levias escort Kaneesha home after school to tell Mrs. Carter what a good student she is. Mrs. Carter reveals that she gave birth to Kaneesha when she was only 15-years-old, and later developed a drug problem. Now that she is getting sober, she does not like herself and thought Kaneesha would be better off without her. Joe offers to help find Mrs. Carter a job, and she agrees to take her daughter back in.A local newspaper refers to Joe as "Crazy Joe Clark" and accuses him of fighting with his student's parents. Frank warns him that he stands to alienate his students and staff the way he alienated his wife, and forces him to reinstate Mr. Darnell, who, as a young, African-American male teacher, provides a good role model for Eastside students.Paterson Fire Chief Gaines (John Ring) arrives at the school for a surprise inspection, but Joe demands he file an official request and sends him away. Soon after, Kid Ray informs Joe that he is quitting school. Guessing that Ray is selling drugs, Joe warns the boy that he will be dead in a year. He sees Thomas and his friends roaming the halls and demands to hear the school song. They sing a beautiful, new arrangement of the song and inform him that the new chorus teacher, Mrs. Powers, taught it to them. Joe finds Mrs. Powers and pretends to be angry before congratulating her on the new arrangement and declaring it Eastside's new alma mater.The practice exam results finally arrive, revealing that only 33% of Eastside students passed. Joe addresses the teachers, telling them it is their failure, and demands that a new peer-tutoring program be instituted. Students begin to thrive under Joe's rigid disciplinary tactics, and he becomes more cheerful around them. Meanwhile, the angry Barrett, now a member of the city's Board of Education, crusades to have Joe fired, and makes a deal to back Bottman's next mayoral campaign if he agrees to oust the principal at her behest. Having learned that Joe has chained the side entrances to the school, they conspire to send Fire Chief Gaines back for an inspection.Frank and Mr. Rosenberg (Ethan Phillips), the school district attorney, come to Eastside to warn Joe about the plan. When several students approach Joe with their problems at the same time, Ms. Levias tries to get Joe's attention but he shouts at her. She later accuses him of being an egomaniac who takes sole credit for the work of his entire staff, and asks to be transferred to a different school.On the day of the basic skills test, Joe gives the students a pep talk and gives a knowing nod to Ms. Levias as he stresses the importance of teamwork. Ms. Powers performs the song "Lean on Me," and the students join her, prompting Ms. Levias to crumple the transfer request Joe handed her that morning. Later that day, Fire Chief Gaines arrives, accompanied by Barrett, and Joe is arrested for breaking the law by chaining fire exits.That night, Barrett addresses the school board at City Hall, demanding Joe's termination and imprisonment. Inside his jail cell, Joe hears his students walking up the streets, protesting his arrest. They congregate outside City Hall, and Barrett addresses them through a megaphone, urging them to go home. Mayor Bottman releases Joe from his cell to address the students, but they refuse to leave when he asks them to do so. Ms. Levias arrives with a piece of paper and demands that Joe read it. He then gleefully announces that Eastside has passed the basic skills test. As a result, the current administration of the high school remains intact and Joe retains his position as principal. Barrett and the Mayor are defeated while the students rejoice by singing the school song. Sometime later, Joe shakes his students' hands as they accept their diplomas at graduation.