Murli Prasad Sharma, nicknamed "Munna Bhai" (literally "Brother Munna") is a bhai or a Gunda - a crime don in the Mumbai underworld. His father had wished him to be a doctor; therefore whenever his father (Sunil Dutt) and mother (Rohini Hattangadi) visit him in Mumbai, he creates the faux Sri Hari Prasad Sharma Charitable Hospital (named after his father) and pretends to live in accordance with their wish.

One year, however, Munna's plan goes awry. His father meets an old acquaintance, Dr. Asthana (Boman Irani) and the two older men decide to marry Munna to Dr. Asthana's daughter, Dr. "Chinki" Suman (Gracy Singh). It is at this point that the truth about Munna is revealed. Dr. Asthana insults Munna's parents and calls them "fools" for being ignorant about Munna's real life. Munna's father and mother, aghast and later heartbroken, leave for their village.

Munna, in grief and despair, decides that the only way to redeem himself and to gain revenge for the humiliation suffered by his father at the hands of the spiteful Dr. Ashtana is to become a doctor in fact. He therefore decides to go to a Medical College in order to obtain a M.B.B.S. degree; the graduate medical degree in India, which stands for "Bachelor of Medicine and Bachelor of Surgery".

With the help of his right-hand man Circuit and others, he "gains admission" to the Imperial Institute of Medical Sciences, where he again encounters Dr. Asthana, who is the dean of the medical school. His success there becomes dependent upon the (coerced) help of Dr. Rustam Pavri (Kurush Deboo).


While Munna Bhai's skills as a medical doctor are minimal, he transforms those around him with the "Jadoo Ki Jhappi" ("magical hug") — a method of comfort taught to Munna by his mother — and the compassion he shows towards those in need. Despite the school's emphasis on mechanical, Cartesian, impersonal, often bureaucratic relationships between doctors and patients, Munna constantly seeks to impose a more empathetic, almost holistic regimen. To this end, he defies all convention by treating a brain-dead man called "Anand bhai" as if the man were able to perceive and understand normally; interacts on familiar but autocratic terms with patients; humiliates school bullies; effusively thanks a hitherto-underappreciated janitor; and encourages the patients themselves to make changes in their lives, so that they do not need drugs or surgery.

Dr. Asthana, who perceives all this as symptoms of chaos, is unable to prevent it from expanding and gaining ground at his college. He therefore becomes increasingly irrational, almost to the point of insanity. Repeatedly, this near-dementia is shown in a scene wherein he has just received unwelcome tidings, at the revelation of which he begins laughing in a way that implies that he has gone mad. This behavior is explained early on as an attempt to practice laughter therapy; an attempt that seems to have backfired, in that Dr. Asthana's laughing serves rather to convey his anger than diffuse it. Meanwhile, his daughter becomes increasingly fond of Munna, who in his turn becomes unreservedly infatuated with her. Some comedy appears here, because Munna is unaware that Dr. Suman and his childhood friend "Chinki" are one and the same; an ignorance that Dr. Suman hilariously exploits. Dr. Asthana tries several times to expel Munna, but is often thwarted by Munna's wit or the affection with which the others at the College regard Munna, having gained superior self-esteem by his methods.

Eventually, Munna is shamed into leaving the College, his guilt for not being able to help a dying friend getting the better of him. On the day of Munna's departure, Anand miraculously awakens from his vegetative state; at this point Dr. Suman gives a heartfelt speech wherein she criticizes her father for having banished Munna, saying that to do so is to banish hope, compassion, love, and happiness etc. from the College.

Dr. Asthana eventually realizes his folly. Munna later marries Dr. Suman, learning for the first time that she is "Chinki". Subsequently the Medical College – under Rustam Pavri's management since the retirement of Dr. Asthana – begins to imitate Munna's radical methods of treatment. Munna and Dr. Suman open a hospital in Munna's home village, where they implement Munna's ideas daily. This, in addition to the birth of their offspring, earns Munna the nickname "Munnabhai – M.B.B.S. - Miya Biwi Bachhon Samet" (literally "Husband Wife with Children"). Munna's parents reconcile with him. His sidekick Circuit marries and has a son, who is nicknamed "Short Circuit" as a pun both on his father's alias and on the process by which an electrical device fails. As the curtains fall, we see Anand, restored to normal mental health, narrating the story to children.