Nandamuri Kalyanram, who earned a star image with his blockbuster like Athanokkade fell flat as his next film Asaadhyudu failed to match his previous hit. Director Teja, who has had no notable hits in the recent past, had joined hands with this youngfor Lakshmi Kalyanam. The film runs with a rural background right through and Teja once again proved his mettle with brilliant picturisation in the first half though he lost grip over the film in the second half because he replaced the heroic nature of the rest of his role with more of sentriment.
Lakshmi (Kaajal) is the daughter Rayavaram sarpanch (Sayaji Shinde). Ramu is the son of Lakshmi's paternal aunt (Prabha). According a "pact" , Ramu decides to ensure Lakshmi is always happy. They both like each other and are in love. Meanwhile, Ramu's friend Gopalam (Srinivasa Reddy) falls in love with Parijatham (Suhasini) who is the daughter of a prostitute (Subhashini), belonging to Kotipalli. The villagers of Rayavaram and Kotipalli turn rivals over a Siva temple in Kotipalli and the Collector orders that no villager should cross the border of their respective villages and puts a barricade.
Kotipalli president's son Giridhar (Ajay) happens to see Lakshmi and loses his heart. In order to marry Lakshmi, Giridhar kills his wife. When Giridhar teases Lakshmi, Ramu challenges to open the Siva temple's doors and perform abhishekam. As he does it, the people of Kotipalli decide to attack the people of Rayavaram. However, Lakshmi's father, who doesn't want to give his daughter to Ramu agrees to marry her with Giridhar.