Sharda (Raakhee) is happily married in a rich aristocratic household to Thakur Pratap Singh (Dalip Tahil) and is the mother to two young boys. Thakur Pratap Singh's father shows mercy to his nephews Bhishamber (Amrish Puri) and Bhanu (Paresh Rawal) after they serve jail time for siphoning the family wealth and stealing within the household and whiling away their time - drinking and gambling. Sr. Thakur (Lahiri Singh) is tricked into signing a will that deprives his son, daughter-in-law and two children from the ancestral wealth and the right to even live in the manor's premises.

Senior Thakur is then killed off in a car bomb and when Thakur Pratap Singh refuses to bow down to cruel Bhishamber Nath after finding out their master plan and after his wife is humiliated publicly by then, he is severely beaten up, stabbed brutally, and left on a nearby railway track to be cut to pieces by the next passing train, leaving behind his widowed wife Sharda, and two young sons, Ram and Lakhan. Sharda, who witnesses the whole scene, vows to avenge the death of her husband, and hopes she will achieve this by visiting the temple every day - praying for justice. She talks about the day when her sons grow up and ultimately destroy their father's assailants, and it is then and then only that she will disperse her husband's ashes.

The evil duo Bhishamber and Bhanu exploit and enjoy the family's riches. Those sons grow into the upstanding police officer Ram (Jackie Shroff) and the easily tempted dreamer, smart talker and street procession dancer Lakhan (Anil Kapoor). If the family is to be avenged, Ram will have to lead his brother away from the path of corruption he's strayed onto to make quick money and protect him from the influence of Bhanu and Bhishamber.

Years later, Ram is now the Police Inspector and is a major obstacle in Bhishamber's illegal activities, while Lakhan is the fun-loving, wanna-be quick millionaire, precocious young man, still living in his brother's shadow and mother's love for him. Ram also has an affair with the Commissioner's daughter, Geeta (Dimple Kapadia) and is constantly teased by his younger brother for not coming out in the open with it.

When Lakhan finds out that there is a big reward for the capture and arrest of notorious gangster Kesariya Vilayti, he single-handedly captures him and claims the reward. Thinking police work is quite simple and easy, he applies for the job, completes his training and also becomes a police inspector like his brother. He also seeks to use this to woo his childhood sweetheart Radha (Madhuri Dixit) and deal with her stingy, eccentric but easily fooled and well-meaning father Deodhar Shastri (Anupam Kher).

Satisfied that her sons have chosen the right path, Sharda goes on a religious pilgrimage to pray for their unity. When she returns, she finds that nothing is the same anymore, Ram and Lakhan have quarreled and no longer speak with each other based on their ideological differences and because Lakhan uses his power to help smugglers and make extra money in an attempt at raising his clout so he can exact revenge against the evil Bhishamber and Bhanu. Ram continues to live in their older family home, while Lakhan has moved into a spacious bungalow, supposedly bought through bribes and black deals. While Ram continues to create obstacles for Bhishamber, Lakhan joins Bhishamber's gang and is on their pay-roll.

However, after Lakhan is tricked by Bhishamber and the ruthless, womanising and dastardly Sir John, Ram has to come to terms and save his little brother and finish what was once started.

• Jackie Shroff... Police Inspector Ram Pratap Singh, Lakhan’s older brother
• Anil Kapoor... Sub Inspector Lakhan Pratap Singh, Ram's younger brother
• Raakhee... Mrs. Sharda Pratap Singh, Ram-Lakhan's mother
• Amrish Puri... Bhishambar Nath, the lead antagonist
• Madhuri Dixit... Radha Shastri, Lakhan's love interest
• Dimple Kapadia... Geeta Kashyap, Ram's love interest
• Gulshan Grover... Kesariya Vilayati, 'Bad Man', Bhishambar's crime partner
• Paresh Rawal... Bhanu Nath, Bhishambar's younger brother
• Anupam Kher... Deodhar Shastri, Radha's father
• Saeed Jaffrey... Police Commissioner Arun Kashyap
• Raza Murad... Sir John, the drug lord, Bhishambar's boss
• Dalip Tahil... Thakur Pratap Singh, Ram-Lakhan's father who is killed by Bhishambar and Bhanu
• Annu Kapoor... Shiv Charan Mathur
• Sonika Gill... Vivienne, Sir John's mistress
• Anand Balraj... Debu, Bhishambar's son
• Mukri... Dhondu Nai
• Lalita Kumari... Mrs. Bhishamber Nath
• Subhash Ghai... Man singing on a motorcycle
• Satish Kaushik... Kanshiram
• Lahiri Singh... Father of Thakur Pratap Singh
• Satish Kaul... Friend of Lakhan Pratap Singh

The soundtrack was composed by Laxmikant-Pyarelal. The song "My Name Is Lakhan" attained popularity, particularly the meaningless lyrics "One two ka Four, Four Two ka One".

35th Filmfare Awards

Won

• Best Supporting Actress - Raakhee
• Best Performance in a Comic Role - Anupam Kher and Satish Kaushik

Nominated

• Best Film - Subhash Ghai
• Best Director - Subhash Ghai
• Best Supporting Actor - Satish Kaushik
• Best Music Director - Laxmikant Pyarelal
• Best Male Playback Singer - Mohammed Aziz - "My Name is Lakhan"
• Best Female Playback Singer - Anuradha Paudwal - "Tera Naam Liya" and -"Bekadar Bekhabar bewafa balma"