Near the rural town of Winton, Queensland, a truck driver finds the body of a teenage aboriginal girl named Julie Mason inside one of the drainage culverts under the road. Newly promoted aboriginal Detective Jay Swan, recently returned from training in the city, investigates the murder. He learns that Julie was a drug addict who would have sex with truck drivers for money. He questions another local aboriginal girl, Tani Williams, who is friends with Julie, but she refuses to speak to him. A neighbourhood boy tells Jay that he found Julie's phone and gives it to him. Jay finds several text messages to his teenage daughter, Crystal. He visits his ex-wife Mary and speaks to Crystal. He asks her if she wants to move to the city with him, but she declines. Mary tells Jay that it is too late for him to be a father. Jay searches a farm near where Julie's body was found and meets its owner, Sam Bailey. Before Jay leaves, he sees a young man leaving in a white hunting truck. Jay later finds out that another teenage aboriginal girl has also gone missing.
One night, Jay observes his colleagues, Johnno and Robbo, visiting a suspicious building in the country. When they leave, he follows them. They stop and flag him down, and Johnno attempts to intimidate Jay, asking if he has ever killed anyone accidentally. Jay later asks his boss about Johnno and is told that Johnno had some unspecified trouble on his previous job in another location, but that he is close to making some big arrests.
Jay visits the Dusk till Dawn motel after hearing that Julie used to go there to sleep with truckers. When he asks the motel owner about frequent guests who stayed there on the night of Julie's death, she tells him about a white man registered under the name "William Smith", who drives a white hunting truck. Jay realizes it's the same truck he saw leaving Sam Bailey's farm earlier. He returns to Sam's farm where he encounters Smith who insults Jay, refuses to let him search his truck, and states that he works as a kangaroo hunter and is an expert shot. Jay goes back to the police station and searches for Smith's police record, but fails to find one. Instead he finds that Smith is actually Sam's son, Pete, a man with a long criminal record, and that Pete had last been arrested for drug possession by another local police officer who had recently been killed on the job. Jay visits the widow of the deceased police officer, who tells him that the officer had been called to work by another, un-named police officer on the night that he was killed.
The next day, Jay follows Johnno until he drives into an alley. Shortly afterward, Pete pulls out of the alley in his truck. Jay then follows Johnno to a rest stop where he meets up with a local drug dealer named Wayne Silverman. When Jay later goes to Wayne's house, Wayne flees, but Jay catches and arrests him. Under questioning, Wayne tells Jay that he deals drugs to local aboriginal girls and then prostitutes them out when they can't pay. He taunts Jay, by asking about Jay's daughter, Crystal. Wayne mentions that he stole a car that contained heroin, but he subsequently lost the drugs. Johnno interrupts the interrogation to release Wayne, who is his informant. Jay stakes out the suspicious building in the country, and sees a man in an orange car hand over Wayne to someone in a Land Rover. Jay later meets Johnno at a diner. Johnno ignores his questions, but states that he is looking for something that's missing. After Jay searches Julie's house and finds several bags of heroin, he calls Johnno to arrange a trade at a hill off Mystery Road.
When he arrives first for the exchange, Jay loads his hunting rifle and pistol. The orange car and Land Rover arrive for the exchange and Jay hands over the heroin, but a hidden shooter wounds Jay in the arm. A shootout ensues as Jay runs back to his car for cover. Jay sees Pete's truck in the distance, and Pete uses his hunting rifle to shoot at Jay. One of the men attempts to flank Jay but is shot by Johnno, who supports Jay with a scoped hunting rifle. Jay shoots several people dead, including a masked man revealed to be Robbo, the driver of the orange car. Pete and Johnno exchange long distance shots as Jay kills the rest of the criminals. As Pete flees, Jay spots Johnno's dead body. After disabling Pete's truck, the two exchange fire, and Jay kills Pete. In the Land Rover, Jay finds Sam in the back shot through the neck and scratch marks on the back of the front seat and a necklace with Julie's name on it.
At sunset, Jay returns to Winton and sees Mary and Crystal waiting for him. He gets out of the car, and the three stare at each other as the Sun sets.Aaron Pedersen as Detective Jay Swan
Hugo Weaving as Johnno
Ryan Kwanten as Pete Bailey/William Smith
Tony Barry as Sarge
Damian Walshe-Howling as Wayne Silverman
Tasma Walton as Mary Swan
Tricia Whitton as Crystal Swan, Jay's teenage daughter
Robert Mammone as Robbo
Bruce Spence as Jim, the local undertaker
David Field as Sam Bailey
Jack Thompson as Charlie Murray
Samara Weaving as Peggy Rogers
Roy Billing as Weapon Shop Owner
Zoe Carides as Motel Owner
Jack Charles as Jay's uncle
Mystery Road received positive reviews from critics and audiences, earning an approval rating of 91% on Rotten Tomatoes. Tom Clift of FILMINK called it a "masterfully executed slice of storytelling that rates as one of our finest films of the past few years." Sandra Hall of The Sydney Morning Herald also gave a positive review, commenting that "Mystery Road's links to the classic Hollywood western are as obvious as its hero's cowboy boots and white hat but they do nothing to diminish its Australianness." Craig Mathieson of The Sunday Age called it a "deeply satisfying and slow-burning modern-day western set in outback New South Wales, Ivan Sen's outstanding film Mystery Road bridges the current divide in Australian cinema with a prominent and precise work."
Not all reviews were positive though. Alex Doenau of Trespass commented "There simply isn't enough dynamism to justify Sen's story. Australian movies have to work harder to secure audiences beyond those who go to them out of a sense of duty or worthiness; Mystery Road simply doesn't go that far."
The film was also a rare foreign screening at the 2014 Pyongyang International Film Festival.
Ivan Sen wrote and directed a sequel to Mystery Road, entitled Goldstone. Aaron Pedersen reprises his role, and joining the cast is David Wenham, Alex Russell, David Gulpilil and Jacki Weaver. A spin-off mini-series also titled Mystery Road will screen on the ABC in 2018.