Reservations tells the story of U.S. Indian Service teachers Will and Mary Parker, both of whom are banished with their son Davey to Red Mesa - an isolated day school on the big Navajo reservation in northern Arizona and New Mexico - for their opposition to the pro-boarding school policies of the Hoover Administration in far-off Washington. In their exile, Will and Mary encounter Hosteen Tse, a great Navajo leader and fount of tribal lore who pleads for aid for his starving people.

Will and Mary do what they can to help, which is little in a time when banks are failing and old friends are turning to theft.

Just when things look darkest, Roosevelt and his New Deal programs bring both hope and new tensions. Will is drawn into a conflict when Joe Garlen, a skilled mechanic who antagonizes everyone, seduces the niece of Franklin Begay. Franklin, Will's Navajo assistant and only close friend, seeks revenge, and he makes Will an unwitting accomplice.

And the troubles keep mounting, as one teacher barricades herself in her cottage out of fear of the Navajos, and a talented young athlete known as "the Navajo Jim Thorpe" sees his dreams of a career in professional baseball tragically shattered by Jim Crow laws.