The rivalry between two families splits a village 'Seetaramapuram' into Seetapuram and Ramapuram. The head of Seetapuram is Bhusayya (Nambiar) and Bhadrayya (Kaikala Satyanarayana) is the head of Ramapuram.
Bhadrayya wants his granddaughter Sundaralakshmi (Soundarya) to study in college. Her father Chandrayah (Chandramohan) fixes her marriage with their Village President Nagaraju (Sri Hari), but due to his father's relentless pressure Chandrayah reluctantly agrees to send Sundaralakshmi to college.
Ram (Akkineni Nagarjuna) is a college student from America, who meets Sundaralakshmi in college and as she isn't used to life in the city, Ram teaches her about about its lifestyle and culture. Afterwards, he goes with Sundaralakshmi to Seetapuram to spend his holidays and meets her family.
Chandrayah makes arrangements for Sundaralakshmi's engagement with Nagaraju where she admits to be in love with Ram. However, Chandrayah doesn't approve of the match and tries to defeat Ram by posing a challenge that he should be able to successfully cultivate 100 acres of land to be a suitable bridegroom for his daughter. Ram accepts the challenge and wins it.
In the meantime, the conflict between the two villages flares up once more and causes of death and destruction. Will Ram succeed in reuniting the two families and bring back peace and harmony to the village? Does he have any ulterior motive for working so hard in re-establishing ties between the two families?