Disgruntled Korean War vet Walt Kowalski sets out to reform his neighbor, a young Hmong teenager, who tried to steal Kowalski's prized possession: his 1972 Gran Torino.

Clint Eastwood is retired Ford factory worker Walt Kowalski. As a veteran of the Korean War, Kowalski has seen and done a lot of things he wishes he hadn't. He's bitter, antisocial, and politically incorrect. After his wife's funeral, we discover that he doesn't get along too well with his sons, specifically Mitch and his wife, His grandchildren don't appreciate him one bit; the granddaughter only wants his stuff, hand-me-downs to take with her to school. They don't make things easy for him, but then again, he doesn't make things easy for them, either. It's a vicious cycle of resentment and miscommunication.

As this is being established, we're introduced to a teenage boy named Thao (Bee Vang), who lives next door to Kowalski with his large Hmong family. He's the black sheep of his deeply traditional family, always doing chores that the women are supposed to do. Having no direction in life, he's pressured by his cousin, nicknamed Spider to join his neighborhood gang. As an act of initiation, Thao must sneak into Kowalski's garage and steal his most prized possession: A 1972 Gran Torino. The attempt backfires as Walt chasing him down with his shot gun. Some time later, Spider arrives with his posse and tries to abduct Thao for messing up. The resulting scuffle is broken up when Kowalski points his shotgun at the gang members and demand they get off his lawn.

Within no time at all, Kowalski's front steps are covered with tokens of appreciation from Thao's family, none of which are appreciated. But then Kowalski gets to know Thao's sister, Sue a remarkably independent young woman. Quick-witted and outgoing, she takes Kowalski's racial slurs in stride, believing that a good man lies behind the disgruntled façade. As he spends more time with Sue and her family, he begins to realize that he has more in common with them that with his own family, which, in all likelihood, scares him more than it brings him comfort.

When Thao formally apologizes for trying to steal Kowalski's Gran Torino, Kowalski puts him to work doing various chores, like repainting a house and fixing gutters. Hardly a scene goes by when he isn't verbally berating Thao, although it's obvious from the start that he's doing it to toughen him up, to make him believe that his life has a purpose and that he should actively be trying to find it. Part of this involves getting Thao to talk like a man. There's a priceless scene in which Kowalski brings Thao to a barber, who has been sharing insults with Kowalski for a number of years. Afterwards, Kowalski arranges for Thao to work at a construction site; the boss, as it turns out, is the perfect man for Thao to test his new vocabulary on. What Kowalski doesn't realize is that he's learning just as much from Thao, especially in matters of caring for other people. Eventually, Kowalski comes to the conclusion that Thao and his family will never be at peace so long as Spider and his gang are around and he decides to take matters into his own hands.