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In the latter part of the 19th century, Australia is still largely untamed. The former penal colony's first-generation Irish immigrant population lives in poverty. Having already experienced police brutality and the death of his father, bushranger Ned (Heath Ledger) is wrongfully imprisoned on the trumped-up charge of stealing a horse. Emerging a few years later, in 1874, Ned is hardened but vows to stay straight. Rejoining his widowed mother and younger siblings, he makes money for his family as a champion bare-knuckle boxer. He also toils as a farmhand on the estate of an English landowner – with whose beautiful wife Julia (Naomi Watts) Ned shares a mutual attraction. But the British colonial system and its Victorian English enforcers remain prejudiced against Australia's working people, and the struggling Kelly family is no exception. When, in 1878, a bullying police officer is rebuffed by Ned's younger sister Kate and targets the family for harassment, Ned and his mother are unjustly charged with attempted murder. Ned is determined to avenge his family's name and strike back against his people's oppressors. While hiding in the bush, he forms a loyal Gang that includes his best friend and first lieutenant Joe Byrne (Orlando Bloom). A chance encounter with the police culminates in shots ringing out, and three officers are killed. The Kelly Gang is forced to go on the run. They blaze a trail through the Outback, robbing banks to fund themselves as well as to recover immigrants' land deeds, and giving police the runaround. The Kelly Gang's reputation as invincible outlaws grows, as does nationwide support from their immigrant countrymen. To the masses, Ned is a hero. To lawmen and the establishment, he is the most wanted man in Australia. £8,000 is offered for his capture – at the time, the highest reward the world had known. When the authorities bring in the formidable Superintendent Francis Hare (Geoffrey Rush), and an army of police, with carte blanche to capture and/or kill the outlaws, Ned strategizes a risky showdown at the Glenrowan Inn. It is this event which will seal his fate – and his legend.