The film starts with a sad Radhika (Sonali Bendre) being introduced to an Army Major (Parmeet Sethi) by her father, Raja Saab (Shakti Kapoor), an erstwhile king and current politician. Raja Saab tells her that the Major will be a good husband for her. On the day of the engagement, news breaks of a terrorist attack in a nearby village led by the terrorist, Shaka (Ajay Devgn). The Major and Raja Saab leave with a large force to that village. But that turns out to be a ruse as Shaka comes to the place of the engagement and burns the marriage Mandap (hall). Then he gives a long look to Radhika, who looks at him with hatred, and leaves. Shaka reaches his lair where he meets his leader, Dara (Amrish Puri) and Shabnam (Madhoo) and the rest of his gang. Dara welcomes him and proclaims him to be Diljale. Shabnam (Madhoo), who loves him, tries to hug him, but Shaka rebuffs it.

Shaka then goes to visit his mother (Farida Jalal), where the story of Shaka is shown in a flashback. Shaka was originally Shyam, a patriotic college student and son of a local village leader. Radhika studies in the same college and they both fall deeply in love. When Raja Saab tries to usurp all the village land, Shyam's father organises all the villages against him. Raja Saab bribes a local police officer (Gulshan Grover), who proclaims Shyam's father as a terrorist and kills him in an encounter. When Shyam goes to Raja Saab's home to take revenge, Raja Saab (who knows of their love affair and feels it is below his family's dignity) frames Shyam also as a terrorist and tries to kill him. Shyam escapes, but Radhika, who only sees him threatening her father, berates him and proclaims him a terrorist. Brokenhearted, Shyam joins Dara's group and becomes Shaka. Back in the present time, the Major surrounds Shaka at his mother's home but finds himself outnumbered by Shaka's men. Shaka asks him to go away. The Major then confronts Radhika and asks her if she knows Shaka from earlier. Under pressure from Raja Saab, she denies knowing Shaka.

The army captures four associates of Dara. To get them freed, Dara asks Shaka, Shabnam and some others to hijack a bus travelling from Vaishno Devi. When Shaka captures them and brings them to a ruined temple, he is shocked to find Radhika (who had gone to Vaishno Devi to pray for Shaka) among the hostages. She confronts him and tells him that he never loved her or the homeland, India. Shaka is stung and tells her that he lost everything for her love. She then tells him to release everyone since they are innocent and says that if he loves her, he will do so. He agrees under the condition that she will remain with him. When Shabnam and the others tried to stop this release, Shaka disarms them and releases the hostages and runs away with Radhika. Dara is livid with the betrayal and wants to kill Shaka. Raja Saab meets him and tells him to kill Shaka and release Radhika. Dara agrees, but in return, wants his four associates released and for his entire group to be safely escorted by Raja Saab to Pakistan.

Meanwhile, the corrupt police officer, who killed Shyam's father, tries to kill Shaka, who disarms him. To save himself, the police officer tells the truth to Radhika, who is shocked to see the depth of love which Shaka has for her. Shaka kills the police officer, but is captured by Dara's men. Dara puts both of them under lock and key, but Shabnam releases Shaka. Shaka confronts Dara and asks him not to sell his homeland to politicians like Raja Saab, but Dara orders his men to kill Shaka. The Major and his army attack at that very moment. Raja Saab, Dara and his men escape with Radhika in their custody with Shaka and Shabnam in close pursuit. The Major finds Raja Saab's son hiding in a corner and finds out the truth about Shyam and Raja Saab.

Dara speaks to his Pakistani Intelligence controller that they need help crossing the border now. Since some Americans are visiting the border and Pakistan doesn't want to be caught supporting terrorists, the Pakistanis decide to mine the border crossing and kill Dara and his men. Dara, Raja Saab and others reach the last border outpost. Raja Saab goes to talk to the captain of the post to facilitate the escape of Dara and his men. But Shaka has already reached there and is waiting for him in the captain's office. He kills Raja Saab, but Dara and his men escape. When a couple of Dara's men try to kill Radhika, Shabnam kills them and rescues her. Shabnam brings Radhika to Shaka, but they are all confronted by the Major. He tells Shaka that he knows the truth and is sorry, but will still have to arrest him. Shaka agrees, but wants to stop Dara and his men from crossing the border since he believes that they still have good in their hearts. The Major agrees and they go in a snowmobile towards the border and reach there before Dara and his men. They see Pakistani soldiers laying mines, but are captured by them.

The Pakistani Major tells them they want to kill Dara and his men since they can always create more terrorists. Shaka and the Major kill them all and go towards the border. When Shaka goes to stop Dara and his men, the Major stops him saying that he wants to kill terrorists. Shaka says that he wants to kill terrorism. He shouts at Dara to stop, but Dara thinks it is a trick. So Shaka jumps at one of the mines and is blasted. Shocked, Dara asks his men to stop. Shaka wakes up in a hospital to find his mother, Radhika and the Major next to him. The Major takes him outside where Dara, Shabnam and everyone is waiting. Dara hugs him and apologises and admits that love can defeat anything, even terrorism. He says that they have all surrendered. Shabnam too, bids him goodbye. Shyam and Radhika hug each other in the backdrop of the Tiranga.

• Ajay Devgn as Shaka/Shyam
• Sonali Bendre as Radhika
• Madhoo as Shabnam
• Shakti Kapoor as Raja Saab
• Parmeet Sethi as Captain Ranveer
• Amrish Puri as Dara
• Gulshan Grover as Inspector Yajwendra
• Farida Jalal as Shyam's Mother
• Akash Khurana as Shyam's Father
• Rakesh Bedi as Raja Saab's Son
• Himani Shivpuri as Raja Saab's Sister

The film has 8 songs. The music composer is Anu Malik.

Diljale was a landmark in Madhoo's career.^[5] Nisha Mehta of The Times of India said, "Not only do I love the heart-warming song Mera Mulk Mera Desh from Diljale but also I like the essence of the film. Ajay Devgn was too good in it."^[6] The film earned a lifetime gross of ? 17.75 cr, with a distributor share of ? 75 million. The film was declared a "Semi-Hit" by Box Office India.^[2]>

Juhi Chawla was the first choice for Radhika's role. Milind Gunaji was signed for Parmeet Sethi's role, but opted out because he did not want to shave off his beard. After Milind Gunaji walked out, Harry Baweja approached Sunil Shetty for Parmeet Sethi's role, but he was busy with Border.