The main events depicted take place between 1994–1996, beginning with scenes from the 1992 Los Angeles riots. Swank plays the role of Erin Gruwell, a new, excited school teacher who leaves the safety of her hometown, Newport Beach, to teach at Woodrow Wilson High School in Long Beach, a formerly high achieving school which has recently put an integration plan in place. Her enthusiasm is rapidly challenged when she realizes that her class are all "at-risk" high school students, also known as "unteachables", and not the eager-for-college students she was expecting. The high school students self-segregate into racial groups in the classroom, fights break out, and eventually most of the high school students stop attending class. Not only does Gruwell meet opposition from her high school students, but she also has a difficult time with her department head, who refuses to let her teach her high school students with books in case they get damaged and lost, and instead tells her to focus on training them discipline and obedience.
One night, two high school students, Eva (April Lee Hernández), a Mexican American girl and narrator for much of the film, and a Cambodian refugee, Sindy (Jaclyn Ngan), frequent the same convenience store. An additional student, Grant Rice (Armand Jones) is frustrated at losing an arcade game and demands a refund from the owner. When he storms out, Eva's boyfriend attempts a drive-by shooting, intending to kill Grant but misses, accidentally killing Sindy's boyfriend. As a witness, Eva must testify at court; she intends to guard "her own" in her testimony.
At school, Gruwell intercepts a racist drawing by one of her high school students and utilizes it to teach them about the Holocaust. She gradually begins to earn their trust and buys them composition books to record their diaries, in which they talk about their experiences of being abused, seeing their friends die, and being evicted. Determined to reform her high school students, Gruwell takes on two part-time jobs to pay for more books and spends a lot more time at school, to the disappointment of her husband (Patrick Dempsey). Her students start to behave with respect and discover a lot more. A transformation is specifically visible in one student, Marcus (Jason Finn). Gruwell invites various Jewish Holocaust survivors to talk with her class about their experiences and requires the students to attend a field trip to the Museum of Tolerance. Meanwhile, her unorthodox training methods are scorned by her colleagues and department chair Margaret Campbell (Imelda Staunton).
The following year comes, and Gruwell teaches her class again, making it the second year of her being their teacher. On the first day of sophomore year, Gruwell makes her class do a "Toast for Change", allowing everyone to open up about their struggles and how they would attempt to change each. (This title - "Toast for Change"- reoccurs for the themes of their fundraisers). In class, when reading The Diary of Anne Frank, they invite Miep Gies (Pat Carroll), the woman who sheltered Anne Frank from the German soldiers to talk to them. After they raise the money to bring her over, Miep shares her experiences hiding Anne Frank. When Marcus tells her that she is his hero, she denies it, claiming she was merely doing the right thing. Her denial leads Eva to rethink her plan to lie during her testimony. When she testifies, she finally breaks down and tells the truth, much to some of her family members' dismay and to her own risk.
Meanwhile, Gruwell asks her students to write their diaries in book form. She compiles the entries and names it The Freedom Writers Diary. Her husband divorces her and Margaret tells her she cannot teach her kids for their junior year. Gruwell fights this decision, eventually convincing the superintendent to permit her to teach her kids' junior and senior year. The film ends with a note that Gruwell successfully prepared numerous high school students to graduate high school and attend college.
