The movie is divided into three main acts: at home before going to war, during the war, and coming home.
Act 1: Michael, Nick and Steven are best friends in a small Pennsylvania town. They have been drafted into the Vietnam war and will leave the following day. Today, Steven is marrying his girlfriend (pregnant by another man). At the wedding, it becomes clear that Michael feels a forbidden love for Linda, the girlfriend of Nick, his best friend. Nick, the gambler, makes daring and dangerous wagers - as he drives, and at the wedding. After the wedding, Michael and Nick take one final deer hunting expedition. On this expedition, Michael reminds Nick of the mantra of the hunt - "One shot"- the perfect, beautiful kill. To Michael, the hunt is like a religious experience. He is the leader of the three and "The Deer Hunter" of the movie's title. Nick makes Michael promise, in case Nick dies, not to leave him there. Michael promises to bring him home.
Act 2: Two years later, the three are accidentally reunited on a battlefield where their units are jointly deployed. All bear emotional scars already, having witnessed the horrors of war. (In one scene, an enemy Viet-cong callously tosses a grenade into a tiny shelter packed with defenseless women and children. Michael incinerates him with a flame thrower as dogs gnaw bodies of the dead.) Fighting together, the three old friends' position is overrun by Viet-cong. They are captured, and taken to a riverside prison where they are kept in semi-submerged tiger cages among rats, corpses, and their own filth. The guards entertain themselves by pitting the prisoners against one another in Russian Roulette; the games do not end until one contestant is dead. (The blood drips onto the prisoners awaiting their own 'turn' below.) Steven is chosen to play, but is so terrified that his hand slips and the bullet only grazes him. He is placed in a cage with water over his head to drown. Michael convinces Nick that they can save him and themselves. He proposes a new game to the guards - he and Nick will play each other, but with *three* bullets in the gun (not just one), increasing their odds of sudden death. By great good fortune, the two friends survive three shots. They are now past the three empty chambers, and have a loaded gun with three bullets, with which Michael proceeds to blow away the three sadistic guards. The three friends make their escape, but are soon separated trying to cross a swollen river. Nick is rescued by helicopter, Steven shatters both legs in a rapids, and Michael rescues him but then leaves him in the care of an army medical unit.
Act 3: Michael and Steven are back home. Nick has been reported AWOL and whereabouts unknown. Steven is at the VA having lost both legs and one arms due to his injuries in the rapids. Michael is physically unharmed but emotionally incapably of resuming his old life. His uneasiness increases when Linda makes advances towards him. He tries to hunt, but even the hunt has lost its beauty for him. He deliberately fires high and lets his quarry escape. He keenly feels his failure to bring Nick home as he promised. He visits Steven, who reports that money is being sent to him anonymously from Saigon. Michael knows in his gut that the money is from Nick, still alive somewhere in Saigon. He resolves return and bring his friend home. In Saigon, he finds an underworld kingpin whom he recognizes from the war. Paying bribes freely, he learns of "The American" who will take all comers, betting his life against fantastic sums of money that he will survive Russian Roulette. Michael pays his way in to play "The American", whom he knows must be Nick. It is. But, Nick is now a drug addict with needle tracks and a dim, glassy stare. He cannot recognize his old friend. Struggling to bring his friend back, Michael picks up the gun, reliving their deadly game in the POW prison. Nick survives one turn. There is no recognition. Michael survives a turn. Finally, he says something that clicks with Nick - he reminds his friend of their old hunting mantra: "one shot." Nick's eyes focus, his memory returns, "One shot!" he repeats. But it is too late. The chamber is already spinning, the hammer clicks home, and Nick's long run of luck runs out. He dies in his best friend's arms. Back in their small town, there is a funeral for Nick, whom Michael brings home, good to his promise. He now accepts Linda's advances, and Steven returns to, for him, his new bride. The friends gather to remember Nick, taking up a chorus of God Bless America. The film ends as they raise one last toast in honor of their fallen friend.
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