'Don' begins, true to its title, as the story of one of the most powerful men in the business of crime, who in spite of being one of the most wanted on the list of Interpol, remains elusive to the police. Along with the police, Don makes a few other enemies through his merciless approach to running his organization, especially when he kills one of his own men, Ramesh, when the latter decides to leave the business.
This introduces Don to two new enemies, Kamini (Helen), Ramesh's fiancee, and Roma, (Zeenat Aman) Ramesh's sister. When Kamini seduces Don and attempts to have the police arrest him, her plan backfires as Don outsmarts her and the police in his escape, and in the process, Kamini is killed. A shattered, revenge-seeking Roma gets her hair cut short, trains in judo and karate, then enters Don's gang after deceiving them into thinking that she too is on the wrong side of the law.
Don is impressed with her fighting skills and allows her to work for him, without realizing her true intentions. Meanwhile, after a couple of unsuccessful attempts at nabbing Don, the police finally succeed, but Don dies during the pursuit, botching Officer D'Silva's plan to reach the source of all crime—the man Don reported to—through capturing Don alive. D'Silva buries Don's body, ensuring that people believe that he may still be alive.
As luck would have it, D'Silva remembers his chance encounter with Vijay (Amitabh Bachchan), a simpleton trying to survive in the hustle and bustle of Bombay in order to support two small foster children, who is an exact lookalike of Don. D'Silva hatches a plan to transform Vijay into Don so he can arrest the rest of the gang.
Around the time Vijay "returns" to Don's gang as Don under the guise of amnesia, Jasjit (Pran), just released from jail, begins his mission of revenge against D'Silva and his search for his children Deepu and Muni, who had been saved and taken care of by Vijay. Vijay manages to replace the red diary with a blank one, and tells his gang that he is going to take revenge on the DSP, but is actually going there to give him the red diary.
Roma goes after him, but Vijay survives the attack and he tries to explain to her that he is not Don, but Vijay. She refuses to believe him at first but D'Silva intervenes and tells her that the man she is trying to kill is indeed Vijay.
Meanwhile, as Vijay learns more and more about Don through his discovery of his diary and Roma's help, he announces to his colleagues that his memory is back. Celebrations ensue, as Don announces his return to the world, but things take a drastic turn when the police raid the celebrations, acting upon Vijay's information, but Vijay's only witness to his true identity, D'Silva, dies in the crossfire.
Tangled in a web of confusion where the police refuse to believe that he is Vijay, whereas his underworld gang realizes that he is indeed not Don, Vijay becomes not only hated by the police, but also by Don's right-hand man, Narang, and the rest of his gang. To add to Vijay's woes, Don's diary which he had handed over to D'Silva – his last hope of proving his innocence – is stolen by Jasjit in an attempt to track down his lost children, without realizing that Vijay is the one man who can reunite them.
Vijay escapes the clutches of the police and the underworld with Roma's help and returns to his old self though he struggles to prove his identity and innocence. After a long fight of Vijay against Vardan's men Roma ends up getting the diary and one of the gangster's snatch it and burn it. The ending reveals that the diary which was burnt was, in fact, the fake diary and Vijay had the real one in order to trick Vardan, he gives the proof to the police and all charges are put against him, Vardan is arrested and Vijay returns to his old life.