The film starts with Angela Kathamuthu (Rohini) and her cameraman in Central Jail interviewing prisoners serving life imprisonment and awaiting the death sentence. She meets Kothala Thevar (Pasupathy) who is serving a life sentence. He tells his version of the story that led to his conviction. According to him the root cause of the problem is Virumaandi (Kamal Haasan) - the happy go lucky rogue.
His support to Kothala Thevar in his clash against Nallama Naicker (Napoleon) brings about a bonding between the two. Annalakshmi (Abhirami), the niece of Thevar falls for Virumaandi. Thevar with an eye on the fertile land owned by Virumaandi does not object to the romance. According to Thevar, Annalakshmi was abducted by Virumaandi and raped. A clash between Virumaandi and Thevar takes places in which 24 innocent people are killed.
Now it's Virumaandi's turn to tell his version of the story. He tells of how he fell in love with Annalakshmi and of her influence on him. She taught him to apologize and that forgiveness is a virtue. A clash at the Panchayata infuriates Annalakshmi and she asks Virumaandi to apologize to the elders whom he insulted. He goes to apologize but Thevar and his men, thinking he has gone to take revenge, come in groups and hack down innocents to death.
Thevar uses his clout to get out of the murder charge but Virumaandi who was involved in the bloodbath is disturbed because he had to lie to save Thevar and his kin. As part of the penance he wills his land for the villagers. Annalakshmi asks him to marry her and leave the village. He marries her at the village temple and goes away in the night with the girl and stays with a relative. Thevar's men come and abduct Annalakshmi and forcibly get her married to Thevar's nephew.
This is to ensure that Annalakshmi's property does not go to Virumaandi. Annalakshmi commits suicide. Virumaandi takes revenge by hacking to death Thevar's family. Thevar escapes. Nallama Naicker gives refuge to Virumaandi and sends him off to Chennai. Thevar and his men ask Nallama Naicker to hand over Virumaandi. A battle ensues in which Nallama Naicker is killed. The case goes to court. Virumaandi turns up in court. He finds all evidence is against him. He is convicted of having raped Annalakshmi and killing her and later on killing 26 men of Thevar who inquired into the rape.
Angela Kathamuthu's cameraman discreetly shoots the deputy jailor conspiring with wardens and convicts to bump off the chief jailor (Nassar). A revolt among the jail staff leads to a jail break, the jailor being stabbed and Virumaandi saving the vital evidence and Angela from the deputy jailor and his henchmen. The film ends with a note that the death sentence should be abolished.