Lal Baadshah (Amitabh Bachchan) is a story of a man who lives for others. He says that every person lives for himself but this man helps others and saves their lives. Lal Badshah who lives with his mother (Nirupa Roy) in small basti in Mumbai, grew up with poor and needy people in the same basti. He is nick-named as Lal Singh. Lal Baadshah is a very helping person and dead against crime. In the same city is Vikram Singh alias Vicky Baadshah (Raghuvaran), Don of the City. There is always clash between him and Lal Baadshah. Vicky's brother Ajit Singh (Mukesh Rishi) a corrupted S.P., both brothers wanted to rule the city.
On other side Dayal Singh is after the treasure of Maharaja Ranbir Singh. Dewan of same kingdom knew the tricks of Dayal Singh and hides the treasure which was not known by anyone. Dayal Singh kills Maharaja Ranbir Singh and his brother Sultan Singh (Prem Chopra) but all in vain. Lal Baadshah accidently meets Kiran (Manisha Koirala) who is an L.I.C. agent and she falls love with Lal Baadshah and determines to adjust her life as being a wife of Lal Baadshah.
In love and war the story changes when Ranbir Singh arises and clash starts between Dayal Singh, Ranbir Singh and Lal Baadshah.