In a poverty-stricken section of Glasgow, Scotland, unemployment is widespread along with rampant crime. Liam (Martin Compston), who has dropped out of school, is a brave and resilient fifteen year old whose mother, Jean (Michelle Coulter), is in prison. He lives with his nasty grandfather (Tommy McKee) and his mother's drug-dealing boyfriend, Stan (Gary McCormack). Liam is routinely beaten up by these two for not obeying their orders. The boy decides to move in with his sister Chantelle (Annmarie Fulton), a single mother who is raising her small son. She has no use for their drug-addicted mother. Liam, on the other hand, wants to buy Jean a caravan overlooking the Firth of Cyde once she gets out of prison. He's convinced that all she needs to stay away from drugs and trouble is a new lease on life in a nice place.

In order to fulfill this dream, Liam convinces his best friend, Pinball (William Ruane), to move up from selling cigarettes in local pubs to stealing Stan's heroin and selling it themselves. With remarkable ease they pull off the theft and start making some easy money. When three drug dealers beat him up, Liam rallies only to be pummeled again. As his sister nurses his wounds, she reminds him of the times he fought off kids in a children's home: "You didn't fight them because you were brave; you fought them because you didn't care what happened to you. That's what broke my heart."

Sweet Sixteen is directed by Ken Loach, who has done an audio commentary for the DVD edition. He has a gift for siding with poor and bedraggled underdogs trying to keep their souls alive in terrible situations. In My Name Is Joe, a recovering alcoholic yearns for a new life in an impoverished neighborhood in Glasgow; in Carla's Song, a well-intentioned bus driver goes to extreme lengths to prove his love for a woman from war-torn Nicaragua; and in Bread and Roses, a Mexican woman working for a cleaning company in Los Angeles is empowered by a struggle for better wages and benefits. In all of these films, the hard-pressed protagonists use hope as a tonic to keep themselves going. As Protestant minister William Sloane Coffin describes it, "Hope arouses as nothing else can arouse, a passion for the possible."

There is something very valiant about Liam's dream for his mother and the things he is willing to do to give her a new life. The teenager's drive and fearlessness impress some well-established drug-dealers who put him to work for them. He comes up with the idea of using a pizza delivery service to distribute the drugs on an even broader scale. Liam's plans for living with his mother in the caravan are demolished when the place is trashed by someone. But the drug-dealer offers him a free and fancy apartment as a reward for his successful efforts in expanding the market. However, Liam's hopes for the future are severely challenged by the refusal of others to accede to his dreams about the future. Sweet Sixteen is a profoundly deep and sad exploration of the spiritual dynamics of hope.