Bhagyalakshmi, a young woman, has a car accident while returning from a party and is hospitalised with severe head injuries. When she recovers, she is diagnosed with retrograde amnesia and she fails to recognise her own parents. She mentally regresses to the state of a child. While she is undergoing treatment, she is kidnapped and sold to the madam of a brothel. R. Srinivas, also known as Cheenu, comes to Chennai to meet his old friend. Together, they visit the brothel to relax. The madam sends Bhagyalakshmi, renamed Vijaya, to his room. Cheenu realises that she is mentally still a child and pities her. He learns that she is from a cultured family, and that she was kidnapped and forced into prostitution.

Cheenu returns the next day and, after paying a huge sum to the madam, takes Vijaya out, supposedly on a pleasure trip. He takes her away to Ketti, where he is working as a school teacher. He takes her to his residence, where he protects her and also pampers her like a child. Viji, as she is called by Cheenu, has completely forgotten her past and becomes very close to him. When Viji accidentally spills ink over Cheenu's documents, angering him, their relationship is threatened, but they reconcile. Later, a local woodcutter named Nataraj lusts for Viji and nearly assaults her, but she manages to save herself. When she tells Cheenu about it, he becomes livid with rage and almost kills Nataraj, but is stopped by his neighbours who were informed of the incident by Viji. Meanwhile, the wife of Cheenu's headmaster is attracted to Cheenu, though he does not reciprocate her feelings.

Viji's father Vedachalam, who was searching her through the police, releases a newspaper advertisement about his lost daughter. A co-passenger who had travelled with Cheenu and Viji from Chennai to Ooty by train gives them a lead. Cheenu takes Viji to an Ayurvedic medical practitioner and leaves her there for a day's treatment. In his absence, the police come to his house searching for Viji. Finally, the police learn that Viji is getting treated at the doctor's place and reach there. Cheenu is unable to come as he is afraid of police action. The treatment goes through successfully. Viji regains her memory and completely forgets about the period between her accident and recovery. Vedachalam and his wife are happy and decide to leave. From the doctor, Vedachalam learns that the person who had brought her there had been taking good care of their daughter; he withdraws his police complaint and they begin their journey to Chennai with Viji.

After the police leave, Cheenu comes running after the car in which Viji is travelling. He follows them to the railway station and tries to gain Viji's attention, but she is unable to recognise him. Cheenu acts like a dancing monkey that Viji developed a liking for, but Viji, unable to comprehend, thinks he is insane and begging for food. Cheenu continues his futile attempts to gain her attention, and the train eventually leaves with Viji not recognising him. Cheenu, who was injured while chasing her car and trying to get her attention, is left alone, heartbroken.

• Kamal Haasan as R. Srinivas "Cheenu"
• Sridevi as Bhagyalaksmi / Vijaya "Viji"
• Y. G. Mahendra as Srinivas's friend
• Silk Smitha as Mrs. Viswanathan, the school headmaster's wife
• Ganthimathi as the brothel owner
• Poornam Vishwanathan as Mr. Viswanathan, the school headmaster
• S. R. Veeraraghavan as Vedachalam
• J. V. Ramana Murthi as the Ayurveda practitioner
• K. Natraj as Natarajan, the woodcutter

Development

Moondram Pirai was produced by G. Thyagarajan and G. Saravanan under their production banner, Sathya Jyothi Films. A. Ramaswamy and D. Vasu were in charge of art direction and editing respectively. In an interview with Anu Hasan on the talk show Koffee with Anu, director Balu Mahendra stated that Moondram Pirai was inspired by the suicide of his wife, actress Shoba; she was 17 years old at the time of her death in 1980. According to S. Shiva Kumar of The Hindu, the climax of the film was a clear allusion to how Shoba left Mahendra without warning. In C. B. Rao's review of the film's Hindi version, Sadma (1983), the English translation of the film's title, Moondram Pirai is given as "The Third Generation." The title Moondram Pirai literally means "the crescent seen on the third day following new moon day."

According to Kamal Haasan, when Mahendra narrated the story of Moondram Pirai to him, Haasan listened to Mahendra for about twenty minutes before accepting the role of Cheenu. The role of Bhagyalakshmi was initially offered to Sripriya, who could not accept the role due to her prior commitments, before Sridevi was chosen for it. Poornam Vishwanathan was cast as the school headmaster, while Silk Smitha, who had done around 20 films by then and was considered only for performing item numbers, was cast as the headmaster's sexually excited wife.

Filming

Moondram Pirai was predominantly shot in Ooty and Ketti, a small town situated close to the former. Shooting also took place in Bangalore. Mahendra did not find hiring a train expensive at that time; as a result, he hired a train for the film's scene where Haasan and Sridevi depart for Ketti, and another train for the film's climax which was shot at the Ketti railway station. Although it was raining on the day the climax was shot, Mahendra decided to continue shooting the scene even though the rain was not part of the film's script. It took nearly three days to film the climax. In the post-production phase, Smitha's voice was dubbed by Anuradha. Mahendra supervised Anuradha's dubbing session and taught her the methods to emote the dialogues for Smitha in the film.

While the film was under production the team was scoffed at for making a film about a youth falling in love with an amnesiac, and that the film would not be a box office success. The film uses intense violin music in both its opening and closing credits. In April 2006, Mahendra said that the inclusion of the song "Ponmeni Uruguthey" in the film was "absolutely unnecessary", stating that the sole reason for its inclusion was the presence of Smitha in the song to help promote the film. The final length of the film was 3,917.74 metres (12,853.5 ft).

Moondram Pirai depicts a young woman whose mental state regresses to that of a child following an accident. Sexuality and the repression of desire are dominant motifs, similar to Balu Mahendra's previous film Moodu Pani (1980). The film also explores the possibility of unresolved sexual tension between the protagonists. Critic K. Jeshi compares Moondram Pirai to other films based on physical and mental disabilities like Sethu... (1999), Pithamagan (2003), Perazhagan (2004), Chandramukhi (2005), Anniyan (2005) and Ghajini (2005). When asked about the reason amnesia was chosen for a disability, Mahendra said the disorder is used as a camouflage and as an excuse to portray relationships in the film.

Film critic Baradwaj Rangan finds the sequence where Haasan's character, Cheenu, narrates the story of The Blue Jackal to Sridevi's character, Bhagyalakshmi, to be a distant echo of the arc negotiated by Cheenu: "He is, after all, a nobody who, through a salubrious twist of fate, becomes the ruler of a woman's life, until he is restored, at the end, to the nobody he was, a fraudulent claimant to her emotions." In his book Dispatches from the wall corner: A journey through Indian cinema, Rangan says that although Haasan is inspired by Marlon Brando, the scene where Haasan burns himself while cooking and vents his anger on Sridevi, is reminiscent of the acting style of Marcel Marceau. In another book of Rangan, Conversations with Mani Ratnam, he states that in the scene where Cheenu enters Bhagyalakshmi's room in the brothel, there was fumbling and embarrassment, whereas in another Haasan film Nayakan (1987), Haasan's character, Velu Nayakar, behaves as if he has visited a brothel before. Nayakan's director Mani Ratnam replied by saying that the two scenes are very different from one another and that it "can't be played the same way".

Nandini Ramnath, writing for the website Scroll.in, noted that Moondram Pirai contains elements common in Balu Mahendra's other films: "realism, evocative and naturalistic cinematography, strong performances, and psychosexual themes that drive the characters to make unusual and often tragic choices." Hari Narayan of The Hindu compared Moondram Pirai to another Haasan film, Guna (1991). In both narratives, the protagonist’s image of an ideal dreamgirl animate his antics. Cheenu, according to Narayan, "looks like a melange of Keats’ tragedy and Freud’s psychoanalysis." Narayan explains the idea of Cheenu keeping Bhagyalaskhmi with him not only as an act of sympathy and love, but also with the intention to preserve her like a portrait. Narayan also states that the character, Robert Ledgard's (Antonio Banderas) attraction to Vera Cruz (Elena Anaya) in Pedro Almodóvar's Spanish film The Skin I Live In (2011), is similar to Cheenu's attraction to Bhagyalakshmi. When Bhagyalakshmi recovers her memory and forgets him, Cheenu is hesitant to come back to his quiet existence, realising that in reality, dreams feel like its antithesis.

The music of the film was composed by Ilaiyaraaja. The soundtrack was released through the record label Agi Music. The number "Kannae Kalaimane", which is based on the Kapi raga, and has shades of the raga Natabhairavi, was written by Kannadasan in "about two minutes" time, after listening to the film's story and the situation for the song. According to his daughter Kalaiselvi, the song was written with his wife in mind. Kannadasan was present at the recording session of the song, which took place in September 1981. It was the last recorded song which Kannadasan wrote before his death in October 1981. "Poongatru" was based on the Sindhu Bhairavi raga.

The soundtrack received positive critical reception. "Ponmeni Uruguthey" that was picturised on Haasan and Smitha developed cult status. Hari Narayan of The Hindu said, "The lullaby "Kanne Kalaimane" sees the tranquillity reach a crescendo." Another critic from The Hindu, Shankar, called "Vaanengum Thanga" a "dream song".