Prem Kahani begins with a father and mother attempting to force their daughter to marry the man of their choice. A priest who has been tasked to arrange the marriage overhears their conversation. He is opposed to the idea of a forced marriage and offers to tell them a tale to explain his reasons.
Once upon a time he used to be a rich man called Chandrakant living in a small town. In the same town there were two widows Heera and Shanti who wanted to arrange the marriages of their children. They wished to wed Shanti’s daughter Maya with Chandrakant and Heera’s son Jagat with Chadrakant’s sister Usha. Maya misunderstands their intentions and thinks her marriage is being arranged with Jagat. She is overjoyed to hear that as she has always been in love with him for some time. Jagat, on the other hand, is reluctant as he wants to focus on his career first. He wishes to travel to Bombay to train to be a lawyer and serve the nation. Maya thinks his reticence is because he does not know who his intended bride is. She reveals that she is to be his bride which pleases Jagat to no end. But their conversation is overheard by their mothers who are concerned by it. They plan to send Jagat away to Bombay and use his absence to convince Maya to marry Chandrakant.
When Jagat reaches Bombay he meets his mentor figure Bhagwandas. Bhagwandas introduces him to his daughter Ramla who used to be a childhood friend of Jagat’s. Ramla is slated to marry the touchy and arrogant Motilal. During a rehearsal for a charity programme Ramla performs with Jagat. She is attracted toward him and prefers him over Motilal. But Jagat misses Maya and wishes to return to her. Unbeknownst to him, Maya has been blackmailed into agreeing to a marriage with Chandrakant by their mothers. On the day of the charity programme Jagat disappears with the intention to return to his home town. But by the time he arrives Maya’s marriage with Chandrakant has already been completed. A despondent Jagat agrees to a marriage with Usha. Hearing that Jagat is getting married Ramla leaves Bombay to see him for one last time. She arrives at the town and takes shelter in a temple. The sorrow of Jagat and Maya during his wedding is palpable, worsened by the fact that Maya is forced to welcome the bride.
After their respective marriages, both couples are unhappy. Motilal finds out Ramla has gone to find Jagat and follws her with murderous intentions. One stormy night everything comes to a head. Jagat and Maya are confronted by their respective spouses and reveal the truth to them. They are both asked to leave by their partners. Ramla is also turned out of the temple as the priest is suspicious of her. As they are wandering in the heavy storm Jagat comes upon Ramla. Motilal discovers them together and kills them both. He also commits suicide. Maya discovers their bodies and at that moment a tree falls, killing her as well. Chandrakant is left traumatised by this turn of events and regrets having judged Maya too harshly. As the tale ends, the parents realise their error and tell their daughter she can marry the person of her choice.