In the ancient Kingdom of Mahishmati in India, Sivagami, the queen mother (Ramya Krishnan), carrying a baby in her arms, emerges from a cave directly next to a very big high waterfall. She is being chased by her country's soldiers. She kills the soldiers but falls into the river nearby. Knowing that she can't be saved, she makes the ultimate sacrifice, her own life, to save the baby. She holds her hand and the child above water, while she drowns herself. Local villagers spot the stranded child and save the infant while Sivagami dies with her finger pointing to the top of the waterfall. Sanga (Rohini) and her husband name the infant Shivudu (Shivu in tamil) and raise him as their own son. To prevent anyone from coming for the baby, they seal the cave with a large rock. Shivudu (Prabhas) grows up aspiring to climb the waterfall which irks his mother as she does not want to lose her son. He attempts again and again to climb the massive waterfall but fails. Seeing that his son isn't going to stop climbing she asks Swamiji (Tanikella Bharani) for a solution. He tells her that she has to pour water on Shivling 116 times and only then will Lord Shiva answer her prayers. When Shivudu finds out about it, he picks Shivling on his shoulders and puts it below the waterfall. From the top of the falls, a mask falls in to the lap of Shivudu. After pressing the mask into the dirt, he creates an imprint of the person whom the mask belongs to, a beautiful girl. He tries again to climb the waterfall and seeing visions of the girl whom the mask belongs to, succeeds. On top of the waterfall, Shivudu, now called Shivu, discovers that the mask belongs to Avanthika (Tamannaah), a rebellious warrior whose group has indulged in a guerrilla warfare against king Bhallala Deva / Palvaalthevan (Rana Daggubati) of Mahishmati Kingdom. The group intends to rescue former queen Devasena (Anushka Shetty) who is the real mother of Shiva and she has been chained in the palace center dais by the king for the past 25 years. Avanthika is given the next opportunity to attempt a rescue mission for the queen. While Avanthika initially doubts Shiva's intentions, later she falls in love with him after she finds out that he has climbed the waterfall for her. Shiva pledges to help her in her mission and sneaks into Mahishmati to rescue Devasena. Meanwhile, the king's Royal Guard Kattappa (Sathyaraj), known for his great warrior abilities, is making arrangements to erect a large statue of the King. Impressed by Katappa's skills, a warrior (Sudeep) from a Kingdom in the Eastern region, offers his friendship to Kattappa (this scene takes place earlier). On the other hand, Kattappa and his group, attack Shiva upon the order of the King. After Shiva beheads Bhadra (Bhallala Deva's son), Kattappa drops his weapons on realizing that Shiva is Mahendra Baahubali, the son of late king Amarendra Baahubali. Shiva's adoptive family travel through the cave to join the others and witness his ascension. A flashback reveals the animosity between cousins Amarendra Baahubali and Bhallala Deva / Palvaalthevan, whose father is Bijjala Deva / Pingaladevan (Nassar). Though Pingala was the elder son of his father, the king, he was denied the throne as he had a disfigured hand from birth. His brother Virendran was given the throne.This creates a great hidden enmity in Pingala's mind. Virendra dies at a young age. Bahubali is born within the next few months, though his mother dies at his birth. Few ministers rebel against the royal family and attempt to take the throne . But Sivagami, with the help of Kattappa kills them all and takes the position of Care-taker ruler of the empire till a new king is crowned. Bahubali and Palvaalthevan are brought up together, but Pingala poisons Palvaal's mind to get the throne what-so-ever. They are both trained in all areas including arts, science, disguise, politics and warfare, but both of them have different approaches towards kingship.