The film takes place in the impoverished village of Laholi where, following droughts, most of the villagers' possessions are mortgaged to the local Thakurani Karamkali (Sudha Chandran). One of the few entertainments the villagers can afford is the lottery, Malaamal Weekly (malaamal is Hindi for 'rich').

Lilaram (Paresh Rawal) is the only educated man in the village. He has the job of intermediary between the lottery organisation and the village, for which he receives a commission whenever a villager wins; thus, he has a relatively good but volatile income. One day he reads the winning lottery numbers and realises that one of the tickets has won the top prize of one crore (about $160,000, a relative fortune in rural India). He devises a plan to obtain the winning ticket and present it to the commission as his own. He hosts a dinner (mortgaging his wife's beloved pet goat to the Thakur's wife to pay for it) and invites all the villagers who play the lottery, but the man he is looking for does not turn up. By elimination he deduces that the winner is Anthony (Innocent Vincent), the town drunk, and reasons that he didn't turn up because he knew that he had won the top prize. Hoping to at least extract his commission, he goes to Anthony's house, and finds him dead, the winning ticket clutched in his hand and a happy expression on his face.

Lilaram attempts to pry the ticket from Anthony's fingers but is thwarted by Anthony's body in rigor mortis. Lilaram eventually succeeds in freeing it with a knife; at this point Ballu (Om Puri), the local dairy farmer, enters the house and discovers him standing over Anthony's corpse with what appears to be the murder weapon in his hand. Ballu's unfortunate assistant Kanhaiya (Ritesh Deshmukh) has a hard time of following Ballu's orders and makes a lot of mistakes. He has emotional involvement with Ballu's daughter Sukhmani also joined with them. Lilaram tells Ballu the truth and convinces him to remain silent in exchange for sharing the lottery winnings between them.

Unfortunately for them, before dying Anthony managed to call the lottery commission and give his name and address, as well as his sister and several people to whom he owed money to tell them of his good fortune. The secret soon becomes impossible to keep, and Lilaram must figure out how to fool the lottery inspector (Arbaaz Khan), who is on high way to the village to interview Anthony. To cover up the whole incident as per plan of Lilaram, Ballu acted as living Antony and inspector became satisfied. After that Ballu, Kanhaiya and Lilaram are introduced to a solitary man named Joseph (Shakti Kapoor) as Kanhaiya also fails to hide Anthony's body but has a secret romance with Sukhmani. All of them successfully buried Antony but unfortunately Bajbahadur aka Bajey (Rajpal Yadav), brother of Thakurani knew their secret plan and Antony's death case. He started threatening them. Some days later, Chokeylal (Asrani) Kanhaiya's father comes to the village and hears of Kanhaiya's insolence which prompts him to lock his own son in Ballu's barn because Kanhaiya obstructing the plan of getting money from lottery. At night Lilaram, Ballu, Chokey and Joseph manage to catch Baje. But they fail to kidnap Bajey and accidentally kidnap Joseph by mistake. Bajey was kidnapped by another gang of nearby village due to their personal vendetta.

After few days the said Lottery inspector came to the village and gave a demand draft to Ballu. When he is returning, Thakuran and Bajey's gang tried to catch him up to inform the real fact of Antony's lottery ticket and comedy chaos going on till the end of the movie.

• Ritesh Deshmukh as Kanhaiya
• Paresh Rawal as Lilaram aka Leela
• Om Puri as Balwant aka Ballu
• Rajpal Yadav as Bajbahadur aka Bajey
• Reema Sen as Sukhmani
• Sudha Chandran as Karamkali
• Shakti Kapoor as Joseph
• Innocent (actor) as Anthony Fernandes
• Arbaaz Khan as Jayesh Agarwal
• Asrani as Chokheylal, Kanhaiya's father
• Rasika Joshi as Mary
• Anand Ingle as local vaidya
• Rakhi Sawant, special appearance in the song "Kismat Se Chalti Hai"
• Sona Nair as Lilaram's wife

The Hindustan Times was broadly positive about Malaamal Weekly, with two reviewers awarding it two and three stars but lauding "the sheer pleasure" of Rawal and Puri's comic performances. Most reviewers, however, were more negative. The BBC gave the film two out of five stars, citing a "weak script" and saying that the humour of Waking Ned had been "lost in translation." Molodezhnaja.ch concurred, repeatedly complaining that the film was too long, had only one song and the rest consisting of "repetitive scenes, long, no, endless dialogue and a poor finale," giving it 2.5 stars on the basis of "a few laughs and solid casting." It did at least give the single song credit for "breaking up the otherwise monotonous events"; rediff.com described it as "the worst Bollywood song ever" in addition to summing the film up as "simply pathetic."

Despite the mixed reviews, the film was a surprise hit at the box office. As of April 2006, the film was the top grosser in Delhi^[6] and had made Rs. 120 million (about $2.6 million) overall.^[7] Priyadarshan shrugged off the poor reviews, claiming "My films have never been given good reviews in Mumbai. I'd get seriously worried about my films the day they're reviewed favourably."^[8]

A sequel was planned later, which was directed by Priyadarshan, the title of Kamaal Dhamaal Malamaal. It starred Shreyas Talpade, Nana Patekar, Paresh Rawal, Om Puri, Dr.Rajeev Pillai and Rajpal Yadav; the rest of the cast. Though later director Priyadarshan claimed that movie was not a sequel but just a story based on same village name. Director informed that he would not like to make sequel of any of his movies unless the story sounds interesting. Therefore he had not directed any sequel movies.