Plot

In 1947, Andy Dufresne (Tim Robbins), a banker, is convicted of murdering his wife and her lover, a golf professional. He is sent to the notoriously harsh Shawshank Prison to serve two consecutive life sentences, since the state of Maine has no death penalty. Andy keeps claiming his innocence, but his cold and calculating demeanor leads everyone to believe he did it.

Ellis Redding (Morgan Freeman), also known as Red, was a contraband smuggler serving a life sentence. Red is being interviewed for parole after having spent 20 years at Shawshank for murder. Despite his best efforts and behavior, Red's parole is rejected which doesn't phase him all that much.

An alarm goes off alerting all prisoners of new arrivals. Red and his friends bet on whichever "new fish" will have a nervous break down during his first night in prison. Red places a huge bet on Andy. During the first night, an overweight newly arrived inmate, nicknamed ''fat ass', breaks down and cries hysterically allowing Heywood (William Sadler) to win the bet. However, the celebration is short lived when the chief guard, Byron Hadley, savagely beats up the fat man for not keeping quiet when he is asked to. Meanwhile, Andy remains steadfast and composed. The next morning, the inmates learn that ''fat ass'' died in the infirmary because the prison doctor had already left for the night. Andy inquires about the man's name only to get put down by Heywood.

Though other prisoners consider Andy "a really cold fish," Red sees something in Andy, and likes him from the start. Andy approaches Red to smuggle a pick for him, an instrument he claims is necessary for his hobby of rock collecting and sculpting. Red believes that Andy intends to use the pick for his escape. But then Red sees how small the pick is.

Andy is beaten and sexually assaulted on a regular basis by other stronger inmates led by Bogs Diamond (Mark Rolston). During the first two years of his incarceration, Andy spends most of his time working in the prison laundry or fighting off Boggs.

In 1949, when a work detail for tarring the roof of one of the prison's buildings is announced, Red pulls some strings to get Andy and a few of their mutual friends assigned to the job, giving everyone a break from the usual routine and a chance to "enjoy" the fine weather. Andy overhears the captain of the guards, Byron Hadley, complaining about being taxed on an inheritance and offers to help him shelter the money legally. Andy informs Hadley of how he can shelter his money from the IRS by turning it into a one-time gift for his wife. He then offers to assist Hadley in filling out the paperwork in exchange for some cold beers for his fellow inmates while on the tarring job. Hadley first threatens to throw Andy off the roof, but eventually agrees and do provide the working inmates with cold beers before the job is finished. Red remarks that Andy may have engineered the privilege to build favor with the prison guards as much as with his fellow inmates, but he also thinks Andy did it simply to "feel normal again."

Andy then helps jailer Hadley (Clancy Brown) save taxes. While watching a movie, Andy approaches Red with another unusual demand and asks for a large poster of the actress Rita Hayworth. Red is surprised by the demand but agrees to place the order. As he exits the theater, Andy once more encounters his tormentors. Although he is able to talk his way out of being sexually assaulted, he is brutally beaten within an inch of his life, putting him in the infirmary for a month. Boggs spends a week in solitary for the beating.

When he comes out, he finds Hadley and his men waiting in his cell. They beat him so badly that he's left unable to walk or eat solid food for the rest of his life and is transferred to a prison hospital upstate. The Sisters move on and never bother Andy again. When Andy gets out of the infirmary, he finds a bunch of rocks for him to sculpt and a giant poster of Rita Hayworth in his cell; presents from Red and his friends.

Warden Samuel Norton (Bob Gunton) hears about how Andy helped Hadley and uses a surprise cell inspection to size Andy up. He finds Andy reading his copy of the Holy Bible and they talk about their favorite verses while the guards are turning the cell upside down looking for illegal possessions. Satisfied with their encounter, the warden leaves and almost forget to give Andy his Bible back. He then encourages Andy to keep reading the Bible saying ''salvation lays within''.

Warden Samuel Norton assigns Andy to the prison's decrepit library, ostensibly to assist elderly inmate Brooks Hatlen (James Whitmore), but in reality, to leverage Andy's financial expertise for managing the finances of the warden and other prison staff. Andy also starts writing weekly letters to the state legislature, requesting funding to improve the library. His financial support practice is so appreciated that even guards from other prisons, when they visit for inter-prison baseball matches, seek Andy's financial expertise. Andy's client expands greatly and eventually includes Warden Norton himself.

Not long after, Brooks suddenly snaps and threatens to kill Heywood in order to avoid being paroled. Andy is able to talk him down. Brooks is paroled in 1954 after serving 50 years, but cannot adjust to the outside world. Brooks goes to live in a halfway house. He is also given a job at a supermarket which he hates. Finding it impossible to adjust to life outside the prison, he eventually commits suicide, leaving the message "Brooks was here" carved on a wooden beam .

After years of Andy's ceaseless letters, Andy receives $200 from the state for the library, along with a collection of old books and phonograph records. The legislature sends a library donation that includes a recording of The Marriage of Figaro; Andy plays an excerpt over the public address system, experiencing a moment of personal freedom before he is punished with solitary confinement. After his release from solitary, Andy explains to a dismissive Red that hope is what gets him through his sentence. Though the state Senate thinks this will be enough to get Andy to halt his letter-writing campaign, he is undaunted and redoubles his efforts.

Not long after, Red has a new parole hearing and realizes he's been in prison for 30 years now. He uses the exact same words he used ten years earlier only with no enthusiasm at all. His parole is rejected again. Andy gives him an harmonica to commemorate his 30 years which Red replies by offering Andy a giant poster of Marilyn Monroe to commemorate his 10 years.

About four years after the Mozart incident, the state senate finally comes to the conclusion that they won't get rid of Andy with just another check. So they allow him a budget of $500 a year to expand the library, knocking down a few walls to unused rooms and renovating the space as he'd planned with his incessant letter campaign. Andy uses the funds wisely and makes deals with book clubs and charities to create the best prison library in the state and names it after Brooks. With the enlarged library and more materials, Andy begins to mentor inmates who want to receive their high school diplomas so they can get decent jobs once they're out.

Warden Norton profits on Andy's knowledge of bookkeeping and devises a scheme whereby he put prison inmates to work in public projects which he won by outbidding other contractors (cheap labor from the prisoners). Andy launders money for the warden, using a fake identity: "Randall Stephens". Randall Stephens officially has a birth certificate, social security number and driver's license. Should anyone ever investigate about the scheme; they will chase a man who only exists on paper. Andy shares the details with Red, noting that he had to "go to prison to learn how to be a crook."

In 1965, Tommy (Gil Bellows) comes to Shawshank, a young inmate convicted of burglary. When Tommy explains that he's been going in and out of prison ever since he was 13 years old, Andy suggests that Tommy should consider another line of work besides theft because he seems to be not so good at it. The suggestion really gets to Tommy, who is also a father to a young child, and he asks Andy to help him work on earning his high school equivalency diploma. Though Tommy is a good student, he is still frustrated when he takes the exam itself, crumpling it up and tossing it in the trash. Andy retrieves it and sends it in anyway

Red tells Tommy about Andy's case. Tommy is visibly upset at hearing Andy's story and tells Andy and Red that he had a cellmate in another prison who boasted about killing a man who was a professional golfer at the country club he worked at, along with his lover. The woman's husband, a banker, had gone to prison for those murders.

When Andy informs Norton, the warden refuses to act. Although Andy promises to keep the money laundering a secret, the warden becomes furious and orders him to solitary for a month. The inmates discuss the sentence mentioning it is the longest time in solitary that they've ever heard of. They also realize that Andy may truly be innocent after all and has spent almost 20 years in prison for a crime he didn't commit.

Tommy receives a letter from the board of education announcing that he has passed the exam and now owns a high school diploma. A guard pass the news to Andy in his solitary cell which makes him smile a little.

One night, Tommy is escorted outside at night to have a private meeting with the warden. Warden Norton asks him if the story he told Andy is true and if he would be willing to testify on Andy's behalf. Tommy enthusiastically agrees. The warden smiles at him before nodding to Hadley to shoot him dead.

When the warden visits Andy in solitary, he tells him that Tommy tried to escape and that Hadley had no choice but to shoot him. Andy doesn't buy that story and tells Norton that ''everything'' stops and that he's not going to work for him anymore. The warden threatens Andy to shut down the library, burn all the books, and move Andy to a much different cell in a much different part of the prison with the most hardened criminals should he stop working for him. He then leaves and orders Andy to another month in solitary to think about things.

A disheveled Andy is released from solitary confinement after two months. Andy tells Red if he's ever freed or escapes, he'd like to go to Zihuatanejo, a beach town on the Pacific coast of Mexico. He also tells Red how he got engaged. He and his future wife went up to a farm in Buxton, Maine, to a large oak tree at the end of a stone wall. He tells Red that, if he should ever be paroled, he should look for that field, and that oak tree. Red worries that Andy is suicidal, especially after learning that he asked a fellow inmate for a rope.

The next day Andy escapes. At the next day's roll call, the guards find Andy's cell empty. An irate Norton throws a rock at the poster hanging on the cell wall, revealing a tunnel. Andy has used the pick to dig tiny amounts of dirt each to create the tunnel over 20 years.

The previous night, Andy escaped through the tunnel and prison sewage pipe, taking with him Norton's suit, shoes, and the ledger containing evidence of the money laundering and corruption at Shawshank. Andy walks into the Maine National Bank in Portland, where he had put Warden Norton's money. Using his assumed identity as Randall Stephens, and with all the necessary documentation, he walked out with a cashier's check. He continues his visitations to nearly a dozen other local banks, ending up with some $370,000. He also exposes Norton before disappearing. Hadley is arrested & Norton commits suicide.

At Red's next parole hearing in 1967, he talks to the parole board about how "rehabilitated" was a made-up word, and how he regretted his actions of the past. His parole is granted this time, but struggles to adapt to life outside prison and fears that he never will. Remembering his promise to Andy he follows Andy's instructions, hitchhiking to Buxton and arriving at the stone wall Andy described. Just like Andy said, there was a large black stone. Under it was a small box containing a large sum of cash and instructions to find him. He said he needed somebody "who could get things" for a "project" of his.

Red violates parole and leaves the halfway house, unconcerned since no one would really do an extensive manhunt for "an old crook like [him]." He takes a bus to Fort Hancock, where he crosses into Mexico. The two friends are finally reunited on the beach of Zihuatanejo on the Pacific coast.