The movie is set in Dehradun, India. The movie opens with the description of the various colleges in the city. The Rajput college has students from affluent backgrounds with each student being an heir to a multimillion-dollar fortune. In contrast, the Model college has students from poor local households. Other colleges include Xaviers College and Queens College, the latter being an all-girls college with the guys from all three colleges trying to woo the students there.

The highlight of the town is the annual inter-college sports championship with a marathon cycle race as the prime event. In the beginning of the film, the race is contested between Ratan Lal Sharma (Mamik Singh) of Model College and Shekhar Malhotra (Deepak Tijori) of Rajput College with the latter winning the race because Ratan had an inferior bike. After the race, both are felicitated by their respective schools for which Shekhar becomes cocky and arrogant.

Sanju (Aamir Khan) is Ratan's younger brother and is everything that Ratan is not. He's a carefree youngster who is full of himself and is always in trouble with his father Ramlal (Kulbhushan Kharbanda), who wants him to act more maturely and become responsible like Ratan. Sanju and his little gang, which includes Anjali (Ayesha Jhulka) (who has a crush on Sanju), bunk sports to smoke cigarettes and roam around town. Anjali and her dad run a vehicle repair shop and Anjali's father asks his daughter to stay away from Sanju.

Ramlal and his family run a small cafe which is the hangout spot for most of the college students. A number of scuffles occur between Sanju and Shekhar because of Shekhar's attempts to humiliate Ratan and his dad. Enter Devika (Pooja Bedi), who immediately catches the fancy of both Sanju and Shekhar. Initially, she leans towards Shekhar but one day she misses her bus on the way to a picnic to meet Shekhar. Meanwhile, Sanju asks Anjali for a car so that he can roam around town. While on his way he spots Devika and leaves his friends at the paan shop and gives Devika a lift. Devika upon reaching her destination finds Shekhar with another girl and goes along with Sanju who, although not rich, brags about his wealth for being student from Xavier School.

Sanju's lie is ultimately revealed when Devika sees him dancing in the Model College group during a dance competition. After the show, Sanju and Devika break up that evening and in a heated argument, Sanju fights with Shekhar's friends. Sanju is almost overpowered when his brother intervenes and chases Shekhar's friends away. Ramlal asks Sanju for the money he had given him to deposit in the bank (which he spent on Devika) which leads to a heated argument between Sanju and his dad & Sanju gets thrown out of the house.

Next morning, Ramlal leaves for town. Ratan tells Sanju that his Dad has forgiven him and asked him to return home, which Sanju tries to ignores. A heated argument and fight ensue between Ratan and Shekhar, which ends with Ratan accidentally falling off a cliff. While Ratan is in hospital, Sanju recollects his childhood with Ratan. When his father returns, he reconciles with him. With Ratan in the hospital, Sanju becomes more responsible and starts to care for his father and bed ridden brother. He decides that he will participate in the race with the help of Anjali and give it his best for Ratan. During his training, he realises his true feelings for Anjali and Sanju fall in for Anjali.

A day before the race, Sanju finds out about the real cause of the accident and confronts Ratan who tells him that he didn't say anything about the accident because Sanju had become responsible and closer to all of them. Ratan asks Sanju to give his best in the race if he really love his brother Ratan.

With his new cycle, Sanju participates in the race. The race begins evenly with both Sanju and Shekhar going head to head. Somewhere in the middle, the two fall and a scuffle ensues between Sanju and Shekhar and his friends. During this, other cyclists take the lead. Shekhar heads back on track with his friends holding Sanju back. Sanju breaks free from Shekhar's friends and joins the race, catching up with Shekhar during the final laps of the race and finally beating him in the closing moments, giving Model College, his father and brother their long-awaited victory.

• Aamir Khan as Sanjaylal Sharma a.k.a. Sanju, Ramlal's younger son and Ratanlal's younger brother
• Deepak Tijori as Shekhar Malhotra
• Ayesha Jhulka as Anjali, Sanju's childhood friend and love interest
• Mamik Singh as Ratanlal Sharma a.k.a. Ratan, Ramlal's elder son and Sanju's elder brother
• Kiran Zaveri as Kalpana, Ratanlal's love interest
• Sooraj Thapar as Shekhar Malhotra's friend
• Pooja Bedi as Devika
• Kulbhushan Kharbanda as Ramlal Sharma, Ratanlal's and Sanjaylal's father
• Aditya Lakhia as Maksood a.k.a. Ghode
• Deven Bhojani as Ghanshyam a.k.a. Ghanshu
• Asrani as Mr. Dubey (Model schoolteacher)
• Faisal Khan in a Special Appearance (College student)
• Imran Khan as Young Sanjaylal
• Sharokh Bharucha as Young Ratanlal
• Anjan Srivastav as Race commentator
• Ajit Vachani as Rajput's Principal
• Deb Mukherjee as Rajput's Coach
• Goga Kapoor as Shakoor
• Jatin Pandit as Xavier's college student and performer at the college dance event
• Lalit Pandit as Xavier's college student and guitarist at college dance event
• Amol Gupte as cycle race commentator
• Girija Shettar as lead in song Jawa ho yaaron

The film was directed by Mansoor Khan, and written and produced by Nasir Hussain. Akshay Kumar had auditioned and Milind Soman was signed for Shekhar Malhotra's role, before Deepak Tijori played the role. Aditya Pancholi was selected to play the role of Ratan, but the role went to Mamik Singh, as confirmed by DNA.

The plot has certain similarities to the 1979 American film Breaking Away. However, Mansoor Khan stated that he only became aware of Breaking Away after the likeness was brought to his attention, some time after the release of Jo Jeeta Wohi Sikander. Both films have several thematic similarities, including friendship, class barriers, bicycle racing, and parental relationship, but are distinctly different films, with different narratives, characters, motivations, treatment and racing rules.