After a terrorist attack on a Federation colony on Solarion IV, the U.S.S. Enterprise crew receives a message from a man claiming to represent the Bajora — a race which has been fighting to regain its home planet after being chased off by the Cardassians. The man takes responsibility for the terrorist attack.
Immediately, Picard confers with Starfleet Admiral Kennelly to discuss the Bajoran terrorist attack. The admiral orders Picard to find Orta, the militant leader of the Bajora, and offer him Federation amnesty, in return for negotiating peace with the Cardassians.
To Picard's surprise, Kennelly also orders the arrival of a new officer — Ensign Ro Laren — to assist Picard in his delicate mission. The crew warily welcomes Ro, a strong-willed Bajoran whom Kennelly released from prison to help with the crisis.
With Ro's help, Picard meets with Keeve, a member of the Bajoran resistance movement, who reveals Orta's whereabouts to the captain. But before the crew can meet with the rebel leader, they discover that Ro has mysteriously disappeared.
Tracing her to Orta's hideout, Picard and the Away Team are taken prisoner by Orta's men. Upon meeting Orta, the crew is stunned to find Ro, who pleads that she was only trying to help with the negotiations. Although Picard is furious with Ro for leaving the ship without permission, he is surprised when Orta announces that the Bajora did not attack Solarion IV. Orta also hints that Picard is being used by someone intent on eliminating the Bajora.
Upon returning to the U.S.S. Enterprise, Ro confides to Picard that Admiral Kennelly is using her as part of a plan to offer weapons to the Bajora in exchange for an end to terrorist activities. In return, Kennelly promised to keep Ro out of prison, where she'd been serving time after a court-martial.
Convinced that the U.S.S. Enterprise is embroiled in a conspiracy, Picard and Ro come up with a counter-plan. Picard informs Kennelly that the starship will escort two Bajoran carriers, containing Orta and his people, to their camp. The Cardassians, threatening to destroy the ships, demand that the U.S.S. Enterprise withdraw within one hour.
Captain Picard then confronts Kennelly, charging that the admiral used the U.S.S. Enterprise to smoke out Orta and the Bajoran terrorists. Kennelly orders Picard to withdraw, at which point the Cardassians promptly destroy the Bajoran ships. Believing that Orta is dead, Kennelly is shocked to learn that the destroyed ships were decoys. Picard informs Kennelly that the Cardassians staged the terrorist attack on Solarion IV, then used the admiral in the hopes of eliminating the Bajora once and for all.
After commending Ro on a successful mission, Picard invites her to remain in Starfleet. Ro accepts, beaming back aboard the U.S.S. Enterprise with her new commanding officer.