Danny Vinyard (Edward Furlong), a high school student and budding neo-Nazi in Venice Beach, California, receives an assignment from Mr. Murray (Elliott Gould), his history teacher, to write a paper on "any book which relates to the struggle for human rights". Knowing Murray is Jewish, Danny writes his paper on Adolf Hitler's Mein Kampf. Murray attempts to get Danny expelled for doing this, but Principal Dr. Bob Sweeney (Avery Brooks) — who is black — refuses, instead informing Danny that he will study history and current events under Sweeney, and that the class will be called "American History X". Danny's first assignment is to prepare a paper on his brother Derek (Edward Norton), a former neo-Nazi leader who has just been released from prison after serving three years for voluntary manslaughter. Danny is warned that failing to submit the paper the next morning will result in his expulsion. The rest of the film alternates between a series of vignettes from Danny and Derek's shared past (distinguished by being shown in black and white), and present day events (shown in color).
Derek and Danny's father is Dennis Vinyard (William Russ), a firefighter who displays racist tendencies in reaction to the news that Derek's English teacher, Dr. Sweeney, had assigned Richard Wright's novel Native Son. Sent on a call to fight a fire in a drug den, Dennis is murdered by black drug dealers. In a television interview conducted after Dennis's death, Derek erupts in a long racist tirade. Shortly thereafter, Cameron Alexander (Stacy Keach) and Derek form a white supremacist gang called the D.O.C. (Disciples of Christ)
A skilled basketball player, Derek is reluctantly dragged into a 3-on-3 game against several members of the Crips in which the prize is control of the recreation center basketball courts. Derek and his friends win the game. Later that evening, Derek leads a large gang of skinheads to attack a supermarket owned by a Korean. They wreck the store, robbing it, and...