In 1947 banker Andy Dufresne is convicted of murdering his wife and her lover and sentenced to two consecutive life sentences at the fictional Shawshank State Penitentiary.
Warden Samuel Norton meets with Andy and reassigns him to the prison library to assist elderly inmate Brooks Hatlen. Andy's new job is a pretext for him to begin managing financial matters for the prison employees. As time passes, the warden begins using Andy to handle matters for a variety of people including guards from other prisons and the warden himself. Andy begins writing weekly letters to the state government for funds to improve the decaying library.
After his release from solitary Andy explains that hope is what gets him through his time. In 1963, Norton begins exploiting prison labor for public works, profiting by undercutting skilled labor costs and receiving kickbacks. He has Andy launder the money using the alias Randall Stephens.
In 1965, Tommy Williams is incarcerated for burglary. He joins Andy's circle of friends, and Andy helps him pass his G.E.D. exam. In 1966, Tommy reveals to Red and Andy that an inmate at another prison claimed responsibility for the murders Andy was convicted of, implying Andy's innocence. Andy approaches Warden Norton with this information, but the warden refuses to listen and sends Andy back to solitary when he mentions the money laundering. Norton then has Captain Hadley murder Tommy under the guise of an escape attempt. Andy refuses to continue the money laundering, but relents after Norton threatens to burn the library, remove Andy's protection from the guards, and move him out of his cell into worse conditions. Andy is released from solitary confinement and tells Red of his dream of living in a Mexican coastal town. Red feels Andy is being unrealistic, but promises Andy that if he is ever released he will visit a specific hayfield and retrieve a package Andy buried there. Red becomes worried about Andy's state of mind, especially when he learns Andy asked another inmate to supply him with six feet of rope.
The next day at roll call the guards find Andy's cell empty. An irate Warden Norton throws a rock at the poster hanging on the wall, and the rock tears through the poster. Removing the poster, the warden discovers a tunnel that Andy dug with his rock hammer over the previous two decades. The previous night, Andy escaped through the tunnel and used the prison's sewage pipe to reach freedom. Andy escapes with Norton's suit, shoes, and the ledger containing details of the money laundering. While guards search for him the following morning, Andy poses as Randall Stephens and visits several banks to withdraw the laundered money. Finally, he mails the ledger and evidence of the corruption and murders at Shawshank to a local newspaper. The police arrive at Shawshank and take Hadley into custody, while Norton commits suicide to avoid arrest.
After serving 40 years, Red is finally paroled. He struggles to adapt to life outside prison and fears he never will. Remembering his promise to Andy, he visits Buxton and finds a cache containing money and a letter asking him to come to Zihuatanejo. Red violates his parole and to cross the border to Mexico, admitting he finally feels hope. On a beach in Zihuatanejo he finds Andy, and the two friends are happily reunited.
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