Aaja Nachle Dia (Madhuri Dixit) is a choreographer who lives in New York with her daughter Radha. One day she receives word that her old dance guru is dying. She returns to her hometown called Shamli with Radha to find that he has already died and left her the responsibility of saving the deserted dance theatre Ajanta, which is to be demolished to make way for a shopping mall.
Shamli has changed a great deal since Dia left. Her parents left the town in shame after she eloped with an American photographer and their house is now owned by the strict Mr. Chojar and his wife. Her childhood friend Najma is married to Farooque, a successful businessman. Both of them greet Dia coldly. The only ally she has left is her old friend Doctor Saab. To save Ajanta, Dia goes to petition the local MP Raja Uday Singh. He issues her a challenge; if she can put on a successful performance using only people from Shamli, he will cancel the demolition.
That night Dia dances in Ajanta and afterwards calls on the people to help her put on a performance of Laila-Majnu. Jeering at her, they leave the theatre one by one, but Raja remains behind to taunt her. Refusing to accept defeat, Dia goes out into the street the next day to scout for talent. When she returns to the theatre she finds that a group of thugs are burning the set, after being ordered by a local election candidate, Chaudhary Om Singh. Instead of being angry, she is intrigued by the ring-leader, Imram, and makes a deal with Chaudhary that she will help him win the next election if he will support Ajanta and if Imram plays Majnu. He agrees and Imram is forced to take on the role. In the town, the girls find out about this and flock to the theatre for the part of Laila. Among them is Anokhi, a tomboy who is in love with Imram. She begs Dia, who is reluctant because of her rough appearance and lack of talent, but agrees in the end thinking that her love for Imram will make her the ideal Laila. Other parts in the play go to Mr. Chojar, who wants to prove to his wife that he is not boring, Chaudhary who plays Laila’s father and Dia’s former fiancé Mohan, who is able to overcome his bitterness towards her.
With one month to put the show together, Dia struggles to get Imram and Anokhi to work together. With Dia’s support, Anokhi changes her attitude and appearance to get Imram to take her seriously and soon their relationship deepens. A few days before the show, Farooque pays Chaudhary to abandon Ajanta and makes Najma spread hurtful stories about Dia. Chaudhary tries to get Imram to give up his part, but Imram is aware of Chaudhary’s political intentions and refuses, leading him to be attacked by Chaudhary’s men while Anokhi tries to protect him. With the whole town against her, Dia loses hope until Najma arrives to apologise and asks to be in the show.
On the night of the show, Dia is amazed to find that the entire town has come to Ajanta. The troupe put on a performance that amazes and excites the audience, including Chaudhary who is moved to tears. Farooque is stunned to see his wife playing the part of Laila’s mother and Mrs. Chojar is shocked and thrilled when her husband appears singing and dancing on stage. At the end, the audience cheers loudly as the cast return to the stage for an encore. The night is a success and Ajanta is saved.
After Dia says her farewells to Shamli, she and Radha leave to find her parents in another part of India. Imram and Anokhi go on to teach dance classes at Ajanta with Doctor Saab’s help and dance becomes an inherent part of Shamli once again.