Krishna (N. T. Rama Rao) but everyone calls him KD No. 1 who is a terror to smugglers, gangsters, and black marketers. Especially he is behind a gang which circulates fake currency because in his childhood his family reputation is ruined by them. I.G Yugandhar (Jaggayya), a sincere police officer is behind KD No 1 and always warns him to stop these illegal conflicts. Krishna gets acquaintance with petty thief Lilly Ratnam (Jayasudsha) who lives with a handicapped father Johnson (Mukkamala) a few funny incidents runs between them. Krishna's mother Shantamma (Anjali Devi) became mad and she is hospitalized from past 20 years. Krishna is struggling to make her normal. Once escaping from police, unfortunately, Lilly enters into the mental hospital and Shantamma reacts by calling her as Sundari. Doctor (P. J. Sarma) says Krishna that if he could get Lilly his mother can be cured. Krishna asks Lilly’s father Johnson (Mukkamala) that is she really his daughter then he tells the truth in past when he is a robber, his fellow robber Jaggu given a baby to him and flee. Lilly helps Krishna to cure his mother and both of them fall in love.
Meanwhile, Krishna helps a poor man for his daughter marriage, unfortunately, money given by him is a fake currency and Police arrest him. Krishna has a friend in the department head constable Venkataswamy (Satyanarayana), with his help Krishna changes the fake currency with the original. The poor man is released but Ventakaswamy is caught, so, he runs away and leaves in various forms of disguise. Parallelly, Jaggu comes back and forcibly takes back Lilly by killing Johnson. Hiding her he reaches to Lilly’s original father Ram Prasad (Prabhakar Reddy) and demands for money in exchange of his daughter. When he asks for proof he shows Lilly photograph who resembles her mother Sundari (again Jayasudha). Jaggu goes to get back Lilly Krishna & Venkataswamy reaches there and protects her. Krishna asks Jaggu to reveal the truth then he starts narrating the past Inspector Rama Rao (Mikkilineni) father of Krishna, Lilly's father Ram Prasad and I.G. Yughandhar are very close friends. Rama Rao is a very honest police officer. He comes to know that Ram Prasad is behind the gang who is making fake currency. Knowing this Ram Prasad implicates Rama Rao in the same fake currency case and sends him to jail by which his wife Shantamma became mad. Ram Prasad’s wife Sundari comes to know the truth and she decides to reveal it out. So, Jaggu killed her and taken away the baby. Krishna also comes to know that his father is alive in Calcutta jail and there is one more person who is head of the gang. When Jaggu is about to reveal his name he is backstabbed by gang members. Krishna asks Venkata Swamy to handover Lilly to her father and he reaches to Calcutta and meets his father. Through him, he comes to know Lilly’s father Ram Prasad is behind these activities. Now he decides to catch culprits with help of Venkata Swamy he creates better fake currency than those gangs. So Ram Mohan calls Krishna for negotiation and asks for printing blocks when Krishna finds out that the original gang leader is I.G.Yugandhar. He keeps condition unless his father is released he is not going to give the blocks. At the same time, Shantamma is recovered. Knowing this Yugandhar kidnaps her, he even doublecrosses Ram Prasad and keeps him in his custody along with Lilly. Yugandhar blackmails Krishna and asks for the blocks. Surprisingly Venkata Swamy turns into a CBI officer Sadasiva Rao, with his help he protects his family and catches the entire gang, proves his father an innocent and make him release. Finally, the movie ends on a happy note with the marriage of Krishna & Lilly.
