A Kuala Lumpur–based gangster Kabaleeswaran alias Kabali is released after spending 25 years in prison on a false charge of starting a massacre at a local temple that killed many, including his wife Kumudhavalli. His opposite gang group '43' consists of 4 people: Tony Lee, a Malaysian gangster; Veerasekaran alias Veera, the second head of the gang; Loganathan alias Loga, the main drug supplier and Seeni, the main money launderer. He soon reunited with his old gang mate Ameer and soon confronts Seeni, injuring him badly. He also makes new gang member, Jeeva, the son of Kabali's old friend. Loga encounters Kabali and tells him that if his wife was alive, Veera would have sold her for prostitution, Kabali became enraged and drives his car on Loga, killing him. However, this incident makes Kabali think if Kumudha is still alive. Later, Kabali survives an assassination attempt by Tamizh Kumaran alias Kumaran, whose father Tamilmaaran was killed by Kabali when Kumaran was a young child, he also met Kabali on the day he released.

The next day, at a function organised by the Free Life Foundation School, a school started by Kabali and his friend Ameer to reform youngsters involved in criminal activities, Tamizh Kumaran also works there as a teacher. There, Kabali talks about his past and mentions how the Tamil community in general have the "Crabs in the bucket mentality" which was the reason to his downfall. Kabali was the protege of Tamilmaaran's father Tamilnesan, a gangster who fought for the rights of Tamil Malaysians. Tamilnesan was killed by Veera who was a member of his gang who disliked his rules such as not involving in illegal activities. There were also his gang friends, Tony Lee, Velu and Loga. Following Tamilnesan's death, Kabali took charge of Tamilnesan's gang. Veera provoked Tamilmaaran by telling him that he, being Tamilnesan's son, should lead the gang and not Kabali. He immediately opposed, but relented where Tamilmaaran invited Kabali and a pregnant Kumudha for a temple function in Madurai as forgiveness.

However, this was revealed to be a trap as Veera and his men confronted Kabali and Kumudha at the function. In the ensuing scuffle, Kabali was brutally attacked while Kumudha was shot and seemingly killed by Tony Lee. Kabali then killed Tamilmaaran for his betrayal in front of a young Kumaran and was soon arrested on a false charge of instigating the massacre. Kumaran, after hearing Kabali's speech, realises his mistake and apologises to him. He tells him that Velu, who was present at the temple massacre, is aware of what happened to Kumudha. Kabali then leaves for Thailand, where Velu is residing. On confronting Velu, he learns that his daughter is still alive. At this juncture, Kabali is confronted by Yogi, a contract killer hired by Veera and Tony Lee. Yogi instead kills Seeni and his men who had come with her to kill Kabali, and reveals herself as Kabali's daughter, who had been raised by Velu. On that night, Tony Lee's henchman shot Kabali and was taken to the hospital.

When Kabali recovers, he calls Tony Lee giving him a heads up that he is coming back to hunt him. Yogi tells Kabali that Kumudha is still alive and is living with a French family in Puducherry. Kabali, Yogi and others leave for Puducherry, where, after several days of searching, they reunite with Kumudha. While in Puducherry, Kabali and his family are attacked by men sent by Tony. However, Kabali and Yogi fight them off and escape safely with Kumudha.

Kabali and his family soon return to Kuala Lumpur, where he is told that Ameer has been severely injured in a car accident set up by Tony; his henchman Jeeva was brutally chopped to pieces after refusing to join Gang 43; they also had destroyed the Free Life Foundation School and started to control the Kuala Lumpur underworld, eliminating any gang who dared to oppose them. On hearing all this, Kabali decides to finish Veera and Tony. He and his family attend the 100th birthday party for a respected Malaysian don Ang Lee. At the party, Kabali destroys the Gang 43's activities by providing a tip to the police. After this, Kabali, Kumaran and Yogi massacres Tony and Veera's gang and eventually, Kabali corners Tony and guns him down.

Some months later, Kabali, Kumudha, Kumaran, and Yogi attend a function organised by the Free Life Foundation. One of the Free Life alumni, a youngster named Tiger, who is known to be aggressive and reckless, walks up to Kabali, with scenes showing him speaking to the police prior to the function. The screen cuts to black, and the sound of a gun clicking and a gunshot afterwards is heard.