Vaastav opens with a family performing the funeral rites of a person on a beach. When the young son of the deceased asks his grandmother all about the deceased, she begins to narrate the story.

As the film opens, Raghunath Namdev Shivalkar or "Raghu" (Sanjay Dutt) and his best friend Dedh Footiya (Sanjay Narvekar) (literally meaning "One and a half feet tall" in Hindi) struggle to find work in Mumbai. Raghu lives in a Mumbai Chawl with his retired father (Shivaji Satham), mother (Reema Lagoo) and a graduate but unemployed brother (Mohnish Behl). They decide to run a pav bhaji stall. They work diligently and are earning good profits. The business seems to be working out very well, before the brother of a local goon (Fracture Bandya) (Jack Gaud) and his men start visiting their stall. Continuously for somedays Fracture Bandya's men visit the stall in a drunken state and abuse dedh futya. Raghu tells dedh futya to not get involved in any argument with them. But one day fracture bandya's men beat up dedh futya badly. Unable to keep their emotions and anger in the face of abuse continuously for days, Raghu and Dedh Footiya accidentally kill Fracture Bandya's brother, not knowing who he is. Now on the run, the two of them soon kill Fracture Bandya and his men also, when the latter tries to find them and kill them both treacherously by arranging a meeting through Suleiman Bhai (Paresh Rawal), a middle man in the Mumbai underworld. Raghu and Dedh Footiya now end up in the Mumbai underworld.

Vitthal Kaanya (Ashish Vidyarthi), a rival gang lord, offers Raghunath (Raghu) and Dedh Footiya protection and later hires them both as hitmen. Raghunath becomes a respected hit man, with Dedh Footiya as his accomplice. With Raghunath in his gang, Vitthal Kaanya hits a peak in the Mumbai underworld. Later Raghunath is approached by the home minister Babban Rao (Mohan Joshi) and who asks Raghunath to work for him and uses Raghunath for his needs. Raghu agrees, much against the wishes of Assistant Inspector Kishore Kadam (Deepak Tijori), a good friend of Raghu, who continues to help him by advising him and providing inside information. Vitthal Kaanya is soon killed by rival gangsters.

While Babban Rao relies on Raghunath, there are some others who despise Raghunath and are waiting in the sidelines to see when he makes an error. Raghunath does so, and Babban Rao is soon under serious pressure from the public and government. He issues a shoot-to-kill warrant for Raghunath. Dedh Footiya is killed in an encounter. Then Raghu comes to know from Kishore that the police have been ordered to kill him in an "encounter". Raghu is now on the run, both from the police and Babban Rao's men. Raghunath knows now that he must protect his wife, parents, and family, as they too are in danger. He realizes that there is no escape from this harsh reality. He arranges to meet Babban Rao with the help of Suleman Bhai (Paresh Rawal) and kills Babban Rao as he would spoil others' lives like his in the future. In the process, Suleiman Bhai is also killed.

Unable to save himself from the police, Raghu comes back to his home and tells his mother to save him. He apparently has lost his mental balance, become crazy and starts hallucinating. His mother takes him away to safety. He tells her to take his gun and kill him, so she remembers how Raghu had once taught her how to use a gun, pulls the trigger and kills him.

As the film ends, the family is seen fulfilling the annual rites of Raghu on the Mumbai beach, as the film had begun, with Raghu's mother explaining all that happened to her young grandson.

• Sanjay Dutt as Raghunath "Raghu" Namdev Shivalkhar
• Namrata Shirodkar as Sonia
• Deepak Tijori as sub-inspector Kishore Kadam (Kisha)
• Sanjay Narvekar as Dedh Footiya
• Mohnish Bahl as Vijaykanth Namdev Shivalkhar, Raghu's brother
• Shivaji Satam as Namdev, Raghu's father
• Reema Lagoo as Shanta, Raghu's mother
• Paresh Rawal as Sulemaan Bhai (Mandavali Badshah)
• Mohan Joshi as Home Minister Babban Rao Kadam
• Ashish Vidyarthi as Vitthal Kaanya
• Himani Shivpuri as Laxmi Akka, Bordello Madam
• Kashmira Shah as dancer in the song 'Jawani Se'
• Mahesh Manjrekar as himself in a song
• Ekta Sohini as Puja, Vijay's Wife
• Jack Gaud as Fracture Bandya
• Ganesh Yadav as Chhota Fracture
• Kishore Nandlaskar - Dedh Footiya's father (drunkard)
• Bharat Jadhav
• Makarand Anaspure
• Anand Abhyankar
• Achyut Potdar
• Hiten Tejwani
• Usha Nadkarni as Dedh footiya's Mother
• Satish Rajwade

Reviewing the film for Rediff.com, Suparn Verma compared its theme to Hollywood films Scarface (1983), The Godfather (1972), and Indian films such as Satya (1998), Nayakan (1987) and Agneepath (1990). He felt the film offered "no new insight into the underworld" and added that it was "fast-paced and taut at times". However, he felt the film was "well shot and edited" and criticized the "lengthy dialogues". He concluded commending the acting performance of Sanjay Dutt and called it "one of the best performances of his career". He added, "From an easy-going guy to a broken man -- the role is essayed with great care by him, maintaining a consistency throughout."^[5]

2000 Filmfare Awards

• Best Actor - Sanjay Dutt
• Best Supporting Actor (Nominated) - Sanjay Narvekar
• Best Supporting Actress (Nominated) - Reema Lagoo

2000 Awards of the International Indian Film Academy

• Award for Artistic Excellence - Sanjay Dutt (Best Actor)
• Award for Technical Excellence - V. N. Mang)

2000 Screen Weekly Awards

• Best Actor - Sanjay Dutt