Mogambo (Amrish Puri) is a brilliant yet insane retired Army General whose goal is to conquer India. From his remote hidden island, he monitors all the evil-doings perpetrated by his henchmen. All of his subordinates know the formal salute "Hail Mogambo!", emphasising his complete authority over his minions. Arun Verma (Anil Kapoor) is an orphan, a street violinist and philanthropist who rents a large, old house in which he houses a dozen or so orphaned children and takes care of them with the help of his cook/ caretaker Calendar (Satish Kaushik). Arun is seldom able to make his ends meet, and owes many debts to the local food merchant Roopchand (Harish Patel), and also he has to pay the landlord Maniklal (Yunus Parvez), much overdue.

In spite of these problems, Arun tries to look on the bright side of every situation. As time goes by, Calendar reminds Arun that the cost of running the home continues to rise. Arun decides to rent out the room on the first floor by placing an advert in a local newspaper, whereby a young petite girl, Seema Soni (Sridevi) becomes his first tenant. Seema is a journalist by profession and prefers the solitude and quiet location. However, when she sees that orphaned children are housed in the same location, she confronts Arun for an explanation. Hence, they get off to a rocky start, but Seema eventually becomes friends with everyone and is very kind and compassionate person. Arun falls in love with her.

One day, Arun receives a mysterious letter from a family friend, Dr. Sinha (Ashok Kumar), which reveals that Arun's late father – who was a renowned scientist – had created a device that would make its user invisible. It still needs to be patented and because Arun was the one and only son, it was his responsibility to complete the protocols and sign the paperwork for it. Arun saw this as an opportunity to and immediately hatches an action plan to get the device. With the directions in the letter, and accompanied by his ward Jugal, enters his late father's old laboratory and finds the wonderful and unique device. The device is in the shape of a gold watch worn on the wrist. When it is activated, it makes the wearer invisible to the naked eye. This invisibility is pervasive except for one flaw: when red light is focused on the wearer, he becomes visible. Arun and Jugal decide to keep this device a secret between them.

After a few months as a tenant, Seema and Arun are invited to a lavish party hosted by an acquaintance – Daaga (Sharat Saxena) and Teja (Ajit Vachani), whereby she performs a song under the guise of a famous Hawaiian dancer, who is unable to make it to the party. After the performance, she is chased by criminals who think she is a rich woman and she is nearly killed, but Arun comes to her rescue her, styling himself as an invisible person introducing himself to her as "Mr. India". Thereafter, Seema falls in love with her rescuer, though not attracted to his civilian alter ego. Arun keeps his identity as Mr. India secret a few more months from everyone, including Seema. He enjoys himself in trying to use the device in many occasions such as the police station, to entertain the orphans, to attract Seema and to enjoy himself or pick pocket etc. Unfortunately, one day Arun uses the device to trick one of Mogambo's henchmen, who report the incident to their leader, foiling his criminal plans. Later on, after much research and effort, Mogambo's computer-aided intelligence teams reveal that Mr. India's specific actions against the gambling den bring benefit to Arun Verma.

Therefore, Mogambo has bombs disguised as toys, planted in places where children can find them. As a revenge and to deter Arun from destroying his plans, Mogambo plants one such bomb to kill Arun's youngest and dearest charge, Tina. After this sad event, Arun, Seema, Calendar, and the surviving children are all captured by the henchmen as prime suspects and brought for interrogation before Mogambo. Mogambo tortures them so that they reveal Mr. India's true identity and the location of the invisibility device. Arun eventually admits to this when Mogambo threatens to drop two children into a pit of acid; but because Arun has lost the device by dropping it accidentally somewhere during the capture, he cannot become invisible to prove himself. Frustrated, Mogambo temporarily sends them into the dungeons.

However, they are all able to escape miraculously. While in the outside world, Mogambo activates four ICBMs, which are poised to destroy all of India. When Arun finds out about this, he confronts him, and the two fight. When Arun has overcome Mogambo, he deactivates the launch which culminates in the missiles detonating on the launch-pad. Arun, Seema, Calendar, and the children escape, while Mogambo's fortress is destroyed. Mogambo dies inside the big fireball caused by the explosion of the missiles on the launch pad. Having lost the device, Arun's dual identity remains a secret to most people, while he returns to his former life as a pauper.

• Anil Kapoor as Arun Verma/ Mr. India
• Sridevi as Seema Soni
• Amrish Puri as Mogambo
• Satish Kaushik as Calender
• Annu Kapoor as Mr. Gaitonde, the Newspaper Editor
• Sharat Saxena as Daaga
• Ajit Vachani as Teja
• Ashok Kumar as Professor Sinha
• Anjan Srivastav as Baburam
• Bob Christo as Mr. Wolcott
• Harish Patel as Roopchand
• Karan Nath as Jugal
• Ramesh Deo as police officer
• Ahmed Khan as orphan
• Aftab Shivdasani as orphan
• Huzaan Khodaiji as Tina

The parody songs include the songs "Pyaar Mein Sauda Nahin" - (Bobby) "Chaahunga Main Tujhe Saanjh Savere" - (Dosti) "Saavn Ka Mahina Pavan Kare Shor" - (Milan) "Ek Pyaar Ka Nagma Hai" - (Shor) "Tere Mere Beech Mein Kaisa Hai Yeh Bandhan Purana" - (Ek Duuje Ke Liye) "Dhafli Waale Dhafli Baja" - (Sargam) "Mera Naam Hai Chameli" - (Raja Aur Runk) "Khilona Jaan Kar Tum To" - (Khilona) "Jhootha Hai Tera Vaada, Vaada Tera Vaada" - (Dushman) and Om Shanti Om - (Karz).

Described by Rediff as "one of the most iconic films of its time", it became one of the highest grossing hits of the year it also found a place in Hindustan Times list of 'Top 10 Patriotic Films of Hindi Cinema'. While the trade famously joked that the film should have been named Miss. India, Rediff also stated that "Sri was a complete show-stealer in the film". Sridevi's iconic imitation of Charlie Chaplin in the film was described by Times of India as "the most hilarious act she has ever done".^[14] Rediff also featured Sridevi in its list of 'Super Six Comic Heroines' stating that "her mobile face expressions could give Jim Carrey sleepless nights" and that "her biggest plus point is her ability to be completely uninhibited in front of the camera".^[15] The famous "Hawa Hawaii" dance was cited by Times of India as "one of the unforgettable numbers of Sridevi",^[16] it also became a popular nickname for the actress.^[17][18] Besides comedy, Sridevi gave Hindi Cinema one of its sexiest rain songs^[19] in the film's chart-buster "Kaate Nahin Kat Te", where Filmfare described Sridevi as "truly a goddess in a blue sari",^[20][21] while iDiva described the song as "unparalleled in Hindi Cinema".^[22] Rediff also featured the song in its list of "Top 25 Sari Moments" praising Sridevi's "ability to look erotic even when she's covered from head to toe".^[23] The song "Kaate Nahi Kat Te" was chosen by NDTV as the most famous rain song in Bollywood,^[24] and Box Office India states that with the success of Mr. India, Sridevi "continued her domination" over her contemporaries Jaya Prada and Meenakshi Seshadri.

The movie could not be awarded that year since no award ceremony took place in the years 1987 and 1988. However, in 2013, Sridevi, the lead actress of the film, was given the Filmfare Special Award for her performances in Mr. India as well as Nagina (1986).

In February 2012, it was announced that producer Boney Kapoor is planning a sequel to Mr. India. In March 2012, reports gave out that the film will be titled Mr. India 2 and features Anil Kapoor and Sridevi reprising their roles from the original film. Boney Kapoor also announced that Salman Khan and Arjun Kapoor had also joined the cast in negative roles. Scripting is going on. Sridevi and Anil Kapoor will reprise their roles and the movie may be directed by Rakeysh Omprakash Mehra. Mr. India 2 is to be shot in 3D. Filming has not yet begun, and as of March 2013, it is in the scripting stage.^[25] The idea for the sequal was shelved following the untimely demise of Sridevi on February 24, 2018.

• The movie is referenced in the 2010 movie Tees Maar Khan.
• The movie is also referred to in the Indian comedy movie Andaz Apna Apna. Shakti Kapoor plays role of Gogo, who is shown to be Mogambo's nephew.
• The movie is a recurring reference in the ongoing Indian soap Madhubala - Ek Ishq Ek Junoon, which airs on Colors channel. Since the soap is partly a tribute to 100 years of cinema and Bollywood,