As a result of a long-disputed treaty with the Cardassians, the Federation has agreed to return several planets to Cardassian control; all colonists will need to be relocated by Starfleet. One such planet, Dorvan V, is inhabited by red Indian settlers, who had left Earth to preserve their heritage on a new home. They had spent two hundred years searching for a world, having finally chosen Dorvan V twenty years before, and are unwilling to leave. Captain Picard believes they are right, but pleads with them to leave, saying that the Cardassians insist on the removal of all inhabitants. During one debate, the Indian leader tells Picard that, according to their research, Picard's ancestor had been involved in a massacre in New Mexico in the 1600s; they believe Picard's involvement in their case is thus a form of kismet, an idea Picard finds disturbing.
Meanwhile, Wesley has returned from Starfleet Academy for a vacation. He's out-of-character though, snappish and depressed and he appears even slightly ill, which really worries Dr. Crusher. He is rude to La Forge in the engine room. Dr. Crusher tries to talk to her son, but initially gets nowhere.
On the planet, Wesley comes in contact with Lakanta, an Indian holy man of sorts. He guides Wesley on a journey of self-discovery, in which he talks to his long-dead father, who tells Wesley that he is destined to go down a path different from his own.
Meanwhile, a group of Cardassians arrives on the planet to scout buildings and equipment being left behind, and raises tensions among the settlers further. Picard realizes he has no choice but to force the Indians to leave. He plans to secretly beam them up to the ship, but Wesley finds out and warns the people. When Picard criticizes his actions, Wesley quits Starfleet.
Soon the Indians capture some of the Cardassians on the planet, and a fight breaks out. The Cardassian gul is willing to send reinforcements to attack the Indians, but Picard warns him that, as the Indians are Federation citizens, he would be required to stop the Cardassians, which could lead to more violence between the two groups. The Cardassian gul reluctantly agrees, and beams up the Cardassians from the planet to prevent more violence.
Eventually Wesley's spirit guide reveals himself as the Traveler, with whom Wesley had contact years ago. Wesley decides to leave Starfleet and explore the universe with him. Wesley tells Beverly this and reveals that he feared disappointing others. Beverly reassures him that she's still proud of him, no matter what he decides to do with his life, which finally breaks through to Wesley. Both mother and son end up crying in each others' arms. This talk gives both Beverly and Wesley the self-confidence boost they desperately need.
The Indians, still insistent on staying on the planet, decide to forgo Federation citizenship and remain on the planet under the Cardassians' control. The Cardassians agree to leave them alone.