Deva (MITHUN) is been treated like a God in his village and people from other villages also worship him. Deva has sacrificed his life for villagers by not getting married, thinking if he got married, he cannot look after the welfare of villagers. His mother (RUNA IRANI) is upset about his decision. One day Deva goes to a far away village where nobody recognises him. He goes into a mela saves Heroine (ARCHANA) from snake. But the Heroine misunderstands him for holding her hand. Jashwant (JACKIE SHROFF) head of heroine's village beats Deva without knowing the fact. Deva leaves the village and takes promise from his driver (RAKESH BEDI) that he should not tell in his village about anything that happened in Heroine's village. But Rakesh Bedi under forced circumstances informs other people in his village that Deva (MITHUN) has been beaten by Jackie Shroff and his villagers. The villagers decide to destroy Jashwant's village.
Meanwhile Jashwant realises his mistake of hitting Deva. He is on the way from one side goes to Deva's home to apologise him.
But in between Rakesh Bedi and Mithun's villagers have already attacked Jashwant's village and they burn his (Jackie's) whole village. Here Deva pardons Jashwant and asks him to go back to his village, Mithun is unaware that his villagers have gone to attack Jackie's village. By the time Jashwant returns to his village and see that his whole village is burnt by Deva's people. He thinks that Deva has cheated him. Deva comes to know that his villagers have burnt Jashwant's village, he gets upset and shouts at his villagers as to why they have done this without his permission. Jashwant comes to Deva's village. Deva apologises but Jashwant tells him that the whole thing has happened with his knowledge and challenges him the he will make Deva's life miserable. From that day the two villagers go into fire.
How Deva clears Jashwant's misunderstanding? How heroine comes to know her mistake? How the two villages become normal you see it and enjoy Phool Aur Aag.
(From the official press booklet)