Young ensign Keith looks forward to the arrival of the new commander of U.S.S. Caine, but is soon disappointed. Lt. Comander Philip Francis Queeg, a battle-hardened navy veteran, turns out to be friend of harsh disclinary methods and a by-the-book officer. His out-of-control spells of rage over small details and the exagerated punishments for even the slightest mistakes of his crew arouse Lt. Keefer`s suspicion that his commander might not be fit for the job.
He insinuates his thoughts to Lt. Maryk. It is only after several ocasions in which Queeg proves his inability that Maryk too begins to believe that his commander might suffer a mental problem. When Queeg has the entire ship turned upside down because of some simingly stolen strawberries, Maryk is fully convinced that Keefer is right. During a typhoon that threatens to sink the ship, Queeg's inability to deal with the crisis at hand forces Maryk to assume command, with Keith's support as officer-of-the-deck, thus bringing about the court martial of the two officers.
During the following military trial Greenwood, a pilot and a lawyer in civilian life, agrees to defend Maryk because the hopeless situation he ses him in.
When it comes to Keefer to testify, he denies ever having suggested that the captain was unbalanced. Maryk comes off as sincere but hopelessly out-of-his-depth at the trial, and Keith too inexperienced and callow to have made the kinds of decisions forced on him. Finally, Queeg is called as a witness, and Greenwald destroys his credibility on the stand by going over each questionable incident, one by one, bringing out the officer's defensiveness until he finally reveals his instability. Greenwald confronts the Caine's officers at their "victory" party, criticizing them for their foul treatment of Queeg, and their failure to offer him the loyalty and support that he was entitled to as captain, and which would likely have averted his breakdown in the first place.