The film begins when Chulbul Pandey (Salman Khan) is still a young boy, who lives with his younger stepbrother, Makhanchan "Makkhi" Pandey (Arbaaz Khan), who was born to Chulbul's stepfather Prajapati Pandey (Vinod Khanna) and mother, Naina Devi (Dimple Kapadia) in Laalgunj, Uttar Pradesh. His stepfather always shows partiality towards Makkhi which constantly angers Chulbul.
21 years later, a gang of robbers steal money from a bank and are counting the loot, when Chulbul, now a cop, apparently tries to recover the money by beating up the robbers but, it becomes clear later that he keeps the money for himself. Chulbul (who now calls himself Robin Hood Pandey) still lives with his family, and except with his mother, he doesn't have a good relationship with his stepfather and Makkhi (whom he bullies at times).
Makkhi is in love with a girl called Nirmala (Mahi Gill) whose father, Masterji (Tinu Anand) opposes their relationship. During a police encounter, Chulbul chances upon Rajo (Sonakshi Sinha). He falls in love with her on first sight, but she doesn't seem to care about him.
Chedi Singh (Sonu Sood), (who is the president of the student council of a regional political party called Lok Manch and is a goon), meets Chulbul and tells him that the people he beat up and stole the money from are party workers and that they were getting money for the party. But, he forgives Chulbul on the condition that Chulbul "works for him". Chulbul flatly refuses.
Makkhi asks his father to arrange his marriage with Nirmala, but his father says that he needs money to repay the loans he took to make his factory so he needs his son to marry a rich girl. So, Makkhi steals the key of the cupboard in which Chulbul keeps his money, but is caught red-handed by his mother. He tells his mother that he intends to give the money to Nirmala's father, who in turn will return the money after marriage through dowry. Although his mother refuses, he takes the money and gives it to Nirmala's father.
Meanwhile, Chulbul meets Rajo and proposes marriage. She rejects it saying that she has to look after her father, Haria (Mahesh Manjrekar), who is always drunk (because of which her brother left the house) and that she cannot marry until he is alive. Chulbul then comes home to find his mother dead. He goes to his stepfather to make peace, as he is the only family left. But, his stepfather says that Chulbul is not part of the family anymore.
Chulbul is then attacked at the railway station by Chedi's men, when he is with Rajo and her father, but, he beats up all of them in a fight.
He sees Makkhi buying new clothes at the market. He doesn't suspect that Makkhi stole the money. Makkhi tells him that he is getting married to Nirmala and, he invites Chulbul. Chulbul tries to convince Rajo's father to give his daughter's hand in marriage to him and to stop drinking. Rajo's father accepts and after Chulbul leaves, he plunges into a lake and commits suicide, as he knows that his daughter won't marry anyone until he is alive. Chulbul takes Rajo to Makkhi's wedding and marries her there. Nirmala's father, Masterji feels disgraced and cancels the wedding.
Makkhi beats up one of the workers in his factory due to a small accident. The worker goes to the police station along with his mother to file a complaint. But, instead Chulbul beats up Makkhi in public, thus disgracing him. Chedi Singh decides to take advantage of the situation and suspend Chulbul. He takes Makkhi and his father to the police station. But, Makkhi's father resolves the situation by accepting an apology from Chulbul. Chulbul meets Dayal Babu (Anupam Kher), the leader of Lok Manch, who also dislikes Chedi Singh. They both come to an agreement to keep Chedi Singh in control. Chulbul adulterates the breweries of Chedi Singh due to which many people fall ill and Chedi Singh is blamed. Chedi Singh is confronted by Chulbul who openly reveals to him that he adulterated the breweries.
To take revenge, Chedi Singh burns Makkhi's factory. Makkhi's father gets a heart attack due to shock and is hospitalized. Makkhi, in desperate need of money for his father's treatment agrees to do anything for Chedi Singh, without realizing that it was Chedi Singh who burnt his factory. Chedi Singh, gives him a task telling him to deliver a crate of mangoes to Dayal Babu's house. But, unknown to Makkhi, there is a bomb in it. After he leaves the house, it explodes, killing Dayal and Rajo's brother (who was a Personal Assistant to Dayal). Chedi Singh gives Makkhi a task to kill Chulbul. Makkhi, knowing that he wouldn't do it, accepts it and meets Chulbul. He confesses to Chulbul that he was sent to kill him by Chedi Singh. He reveals to Chulbul that Chedi Singh made him plant the bomb unknowingly. Chulbul forgives him and reconciles with his stepfather.
Makkhi meets Chedi Singh, who thinks that Makkhi killed Chulbul and reveals to Makkhi that he had killed Makkhi's mother. Chedi Singh is then informed that Chulbul is arriving with a huge police force. Makkhi reveals to Chedi Singh that he didn't kill Chulbul. In a final battle, Chulbul arrives and takes down all the goons and rescues Makkhi. He then kills Chedi Singh in a one-on-one fight after Makkhi reveals to him that Chedi Singh killed their mother.
In a happy ending, Chulbul gets Makkhi married to Nirmala in the presence of their father, while, Rajo reveals that she is pregnant.
