It is 1917, and Portugal is feeling the aftereffects of a storm of anti-religious sentiment and the violent overthrow of the government by socialist forces. Many church fathers are jailed, and all are fingerprinted, photographed and registered as (possible) criminals. The rural town of Fatima is small enough to have escaped much of this persecution; their church remains open, and most of the people are very devout.
Watching their flocks and playing in a field outside town on May 15 (the actual date of the first apparition was May 13), Lucia dos Santos and her cousins Jacinta and Francisco Marto see a flash of light and think it is going to rain. Gathering their sheep together and heading for home, they run straight into an unusual "cloud of light" surrounding a little tree on which a lady stands. Speaking slowly and gently, the lady asks them to return on the 13th of each month and to offer their sufferings to God for the salvation of sinners. She entreats them to say the Rosary for world peace. Later, they encounter their agnostic friend Hugo who tells them it is best not to reveal the vision to anyone else, but of course on returning home Jacinta immediately divulges her sightings.
Jacinta and Francisco's parents believe, but Lucia's mother reacts with disgust and subjects her daughter to emotional and physical abuse. She forbids Lucia to return to the Cova, but Lucia does so, and is told that her cousins will die and go to heaven "soon", while she will live a long life in holy service. The church father suggests the visions might be from Satan. Kidnapped by provincial administrator Arturo Santos, the children are threatened with death if they don't change their story. Trying to frighten them, he has first Jacinta, then Francisco dragged into another room. Jacinta's terrified screams convince Lucia that her cousins are dead, but she refuses to deny what she's seen. Warning her that she's about to experience "the full treatment", Santos reunites her with her cousins, who are very much alive, then throws them all in jail. There they find Hugo, who stands by them as they convince all the prisoners to join in the Rosary. Unable to find any prosecutable evidence, Arturo frees the children, who find that the entire population of Fatima has been standing outside waiting for them.
On October 13, when the lady promised "a sign that will make them believe," about forty thousand people arrive, waiting through a torrential downpour. At precisely noon the clouds part and the sun shines brightly upon all the people -- then the sun shifts through a rainbow of colours and appears to drop toward the ground. Many people panic, some pray or watch calmly, and a few disabled people are healed. As the sun returns to normal we see Hugo standing in the middle of the kneeling crowd, his hat still on. Removing it, he says "Only the fool sayeth there is no God." A short epilogue shows the huge basilica where the tree once stood. Inside, Lucia is a nun praying before the tomb where her cousins are buried.