Waiting beside a river for a battle to begin, Henry Fleming, an 18-year-old private in the Union Army, wonders whether he will have the courage to face the terror of battle or run when the going gets tough. Jim Conklin, his hometown comrade, admits he would run if the other soldiers fled. In the middle of the ensuing battle Henry deserts his regiment when it appears the enemy soldiers might carry the day; but after reaching the rear he learns his unit has carried the day. He escapes in shame to a nearby forest and stumbles across a group of injured soldiers that includes his friend Jim, who is losing blood and delirious. He freaks out and runs when Jim dies and gets smacked on the head with a rifle by a soldier, which provides him with a wound that serves as his red badge of courage. His honor recovered, he fights capably in the next battle and later becomes a flag bearer and leads a group of men to victory over a Confederate regiment.

The story is known for its realistic portrayal of battles, which are thought to be drawn from accounts of the Battle of Chancellorsville. Unlike most war chronicles, the focus is on the state of mind of the protagonist as he moves from coward to hero and not on the external activities of the battle. Originally serialized in newspapers in December 1894, the book was published in October 1895, became a bestseller, made Stephen Crane an instant celebrity and established his place as an important modern writer.