Banjara (Pran) breaks jail and comes to his home in the village to take his family away for safety as he was going on warpath against Thakur Dharmpal (Kader Khan) who had falsely implicated him in a made-up case, which has been the cause of his going to jail. Durga (Sridevi), his elder daughter, refuses to accompany him as he was going on a wrong path by taking law in his own hand. Instead, she starts supporting the family by doing 'Tamasha' with the help of her younger brother and sister, while Banjara becomes a dacoit and starts destroying Dharampal's holdings.
Thakur's men tease Durga as she is doing Tamasha but are beaten by Rajoo (Shatrughan Sinha) the long-lost son of Pagli (Lalita Pawar), who has come back to the village now. Durga likes him.
Vinod (Ranjit), Dharampal's younger brother, had seen Durga and is badly infatuated with her and manages to take her to his farm and tries to dis-honour her.
Durga fights back and in the struggle picks up a gun and shoots Ranjit. She comes running to the house to take the family away from there but Dharampal burning with the anger arrives with his men, kills the children and Durga's mother. Durga gets mad with rage, retaliates by' shooting and killing some of the men and runs away to the jungle. Eventually she becomes a dacoit.
Rajoo comes back to the village and reveals his identity as a Police Officer who in fact had come here to investigate the reported atrocities of Dharampal in the area. He is shocked to know Durga has killed people and become a dacoit. He searches for her in the Jungle and finally finds her but their paths are different now He is a Police Officer and she is a Sherni, a ferocious dacoit, who rules the area.
They still love each other but can they ever meet and be one?
Can Sherni ever take revenge for the deaths of her family from Dharampal and his brother?
And when finally the lovers meet with guns in their hands - who will live and who will die?
FOR ANSWERS SEE SHERNI.
(From the official press booklet)