Near the ancient Indian kingdom of Mahishmati, an injured woman named Shivagami exits a cave underneath a mountain waterfall, carrying an infant. She kills two soldiers pursuing her and attempts to cross a raging river, but slips and is washed away in the current. Before drowning, she holds the baby aloft and prays to Lord Siva, explaining that she doesn't care about her life and wishes that the baby, Mahendra Baahubali must live. The child is saved by the people of the local Amburi tribe, who reside near the river and worship Lord Shiva. The wife of the tribe's chieftain, Sanga, decides to adopt the boy and names him Shivudu.
Shivudu grows up to be an ambitious and mischievous child, obsessed with ascending the mountain. Despite Sanga's pleas, he tries many times to scale the cliffs but always fails. As a young man, he is shown to possess superhuman strength when he lifts a Lingam of Lord Siva and places it at the foot of the mountain. A mask then falls from the cliffs, and realizing it possesses feminine features, Shivudu finally succeeds in scaling the mountain in order to find the woman the mask belongs. Upon reaching the top, he sees a beautiful woman named Avantika fighting Mahishmati soldiers. He discovers that she is a member of a local resistance group dedicated to overthrowing the tyrannical king of Mahishmati, Lord Bhallaladeva, and rescuing royal captive Princess Devasena. Shivudu is immediately smitten with Avantika and secretly follows her, even managing to draw a tattoo on her hand while she sleeps. When she discovers Shivudu she attacks him, but he outmaneuvers her and returns her mask. Realizing he scaled the entire mountain to find her, she reciprocates his feelings. The pair are later attacked by more soldiers, and after defeating them, Shivudu pledges to rescue Devasena himself and departs for Mahishmati. He secretly enters the city on Bhallaladeva’s birthday and assists in erecting a gigantic statue of the king. In the process, he is recognized by a worker, who then leads the other workers in chanting 'Baahubali,' to Shivudu's confusion and Bhallaladeva's displeasure. Shivudu later infiltrates the royal palace disguised as a soldier and distracts Bhallaladeva and his guards long enough for him to rescue Devasena. Bhallaladeva sends his son, Bhadra, and the royal family's loyal slave Kattappa to recapture Devasena. In the ensuing fight, Shivudu beheads Bhadra as both the Amburi tribe and resistance warriors arrive. Kattappa lunges at Shivudu, but stops short of attacking him upon seeing his face. He falls into submission at Shivudu's feet, proclaiming him to be 'Baahubali'.
The next morning, Kattappa reveals to Shivudu that he is actually Mahendra Baahubali, the son of Amarendra Baahubali, a famous warrior prince from Mahishmati. Amarendra Baahubali was born an orphan; his father, King Vikramadeva, died before he was born and his mother died giving birth to him. Lord Bijjaladeva, Vikramadeva's brother and the next in line for the throne, is denied the position due to his scheming nature, and as such Bijjaladeva's wife, Lady Shivagami, assumes power with the intention of raising both her son Bhallaladeva and the orphaned Baahubali in an equal manner to select the next heir to the throne. While the two are raised as brothers and trained rigorously in numerous subjects, Bhallaladeva retains the power-hungry nature of his father while the affable Baahubali becomes beloved by the kingdom.
A traitor named Saketudu turns out to be a spy for the savage Kaalakeya tribe, known as destroyers of kingdoms. Their chief Inkoshi declares war on Mahishmati, and Shivagami decides that whoever kills Inkoshi will be crowned king. Bijjaladeva secretly supplies Bhallaladeva with more weapons and men, but Baahubali still defeats more raiders than Bhallaladeva by using innovative tactics and by inspiring his soldiers. While Bhallaaladeva kills Inkoshi, Baahubali's valour and concern for the people of his kingdom convinces Shivagami to make Baahubali heir apparent.
In the present day, Shivudu's adoptive parents, impressed by Kattappa's story, wish to meet Baahubali. A dejected Kattappa explains that Amarendra Baahubali is dead, and upon being questioned by Sivudu, he reveals that the traitor who murdered Baahubali was none other than him, setting a path for a sequel. Kattapa is revealed to be the side companion of Mahendra's father.
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