Intro
This story starts out in the thick of it with a man waiting to be hanged from a bridge. At first, we don't know the details of who he is and what he's done to get into this situation. It takes a few paragraphs to get the gist, with Bierce choosing to ignore the classical narrative model in which the story and the narrative match each other step by step. In other words, it's not your standard beginning→middle→end affair.
This isn't an accident or a case of sloppy writing, either: by starting off with a guy waiting to be hanged, Bierce chooses a scenario that grabs the reader's attention and fires up some interest.
As we read the first paragraph, we find ourselves asking a bunch of questions about who this guy is and how he's gotten into this situation. We soon get our answers, as Bierce follows up the story's dramatic opening by describing the man in question and giving us some background info.
Having learned that he's a married man named Peyton Farquhar, we rewind to the event that ultimately led to him waiting to be hanged. It turns out that the story is set during the American Civil War, and Farquhar is rooting for the South. Having received a tipoff that the Northern troops were repairing the Owl Creek bridge so that trains could travel across it, he had gone to the bridge with the aim of burning it down. Unfortunately for him, however, the guy who gave him the info about the bridge was from the opposing side and was setting him up. Ouch.
Now that we have our background details, we return to Owl Creek Bridge to witness Farquhar being hanged. Miraculously, though, we find that the rope has broken. We consequently follow Farquhar as he flees from his captors and desperately makes his way home.
Throughout this journey, Farquhar feels seriously disoriented and finds that there's something weird about his surroundings—despite being the region in which he and his family live, it's giving off major Twilight Zone vibes. He notices, for instance, that the forest is much bigger and wilder than he'd imagined, and that the road towards his home seems empty and untraveled. Even the stars seem alien. Still, he carries on his journey until he finally nears his destination.
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His neck was in pain and lifting his hand to it found it horribly swollen. He knew that it had a circle of black where the rope had bruised it. His eyes felt congested; he could no longer close them. His tongue was swollen with thirst; he relieved its fever by thrusting it forward from between his teeth into the cold air. How softly the turf had carpeted the untraveled avenue—he could no longer feel the roadway beneath his feet!
Doubtless, despite his suffering, he had fallen asleep while walking, for now he sees another scene—perhaps he has merely recovered from a delirium. He stands at the gate of his own home. All is as he left it, and all bright and beautiful in the morning sunshine. He must have traveled the entire night. As he pushes open the gate and passes up the wide white walk, he sees a flutter of female garments; his wife, looking fresh and cool and sweet, steps down from the veranda to meet him. At the bottom of the steps she stands waiting, with a smile of ineffable joy, an attitude of matchless grace and dignity. Ah, how beautiful she is! He springs forwards with extended arms. As he is about to clasp her he feels a stunning blow upon the back of the neck; a blinding white light blazes all about him with a sound like the shock of a cannon—then all is darkness and silence!
Peyton Farquhar was dead; his body, with a broken neck, swung gently from side to side beneath the timbers of the Owl Creek bridge.
Analysis
How's that for a twist? If we reread the story, though, we can tell that something isn't right. Aside from the rope breaking and Farquhar escaping from a troop of soldiers, the weirdness that Farquhar notices on his journey home can be explained by the fact that it's not real: all the stuff that Farquhar feels and sees during his escape are really his last moments of feverish imagination before he is hanged.
The narration hints at this, too. It's third person throughout the story, but it switches from past to present tense when the narrator writes that Farquhar "now […] sees another scene" and "stands at the gate of his own home." This shift suggests that something is up, and that maybe Farquhar is in some sort of intense dream world. That the past tense returns at the end—"Farquhar was dead"—confirms that we're now being told what really happened.
This is pretty morbid stuff, but you can't say it's not effective. Twist endings in general are interesting in that they not only shock us but also encourage us to go back over the story and see it in a different light. As we know, time and space are key concepts in narrative theory, and they share a close relationship—a point that Bakhtin emphasized when describing the chronotope.
That's certainly true here, with Bierce playing around with time and making us rethink how it pans out in this story. We first think that, after the rope breaks, the story carries on for quite some time. However, in reality, the whole story probably covers a few seconds, max.
This also highlights Genette's distinction between story time and narrative time: the story time once Farquhar is hanged is ultra short, but if the narrative actually mirrored this, it would all be over in a flash. Instead, the narrative stretches Farquhar's final seconds into what seems like a much longer period.
This story plays around with space, as well. At first, we think that Farquhar is travelling across the landscape after his narrow escape from death: he makes his way through the stream that's under the bridge, then through a forest, then down a road leading to his house. We get the impression that he has undergone an exhausting journey filled with peril and is now finally nearing his destination.
In terms of the story itself, though, once Farquhar has reached the bridge, that's pretty much his final destination—all that's left is a short drop.