Northern Lights begins in the present, as 95 year old Henry Martinson recalls his life as a North Dakotan farmer in 1915. The film then becomes a reconstruction of that time, with its fictional main character Ray Sorenson.

Farming is a bleak prospect. The weather is harsh, and any temporary setback in the farmers' work invites foreclosure by the banks, which are owned by wealthy Eastern interests.

Ray organises the farmers into forming the Nonpartisan League. The League works toward breaking the outside control over farm prices by establishing a state bank. Some of its members become involved in political activitiesas candidates for office, fighting against politicians concerned with protecting the economic status quo.

The communal life of the farmers is presented through the use of diaries and accounts of Swedish immigrants of the time. There are scenes of a funeral, an engagement party, rallying songs. Ray's personal story revolves around his relationship with Inga Olsness. He becomes involved with the League after her parents are forced to leave the farm through bank foreclosure, but his commitment creates tensions that threaten their emotional security together.

In an interview, directors Hanson and Nilsson have expressed their artistic goals: 'to make films about real people in a real social context.