This movie jumps back and forth among three key storylines: (1) Jamal Malik (Dev Patel) on the television set of India’s Who Wants to be a Millionaire, (2) Jamal being interrogated by the police and accused of cheating on the game show, and (3) flashbacks to Jamal’s childhood.
In Mumbai, 2006, Sergeant Srinivas (Saurabh Shukla), a fat, bald police officer, is smoking a cigar while beating and interrogating Jamal. Jamal is then repeatedly dunked in a bucket of water by the Sergeant and other cops.
Interspersed with the torture sequence are scenes from Jamal as a new contestant on Millionaire. Jamal is introduced to the audience as an assistant at a “telecom company.” The game show host Prem Kumar (Anil Kapoor) engages in chit chat with Jamal before asking the first question.
Back at the police station, Jamal has been tied up and hung from the ceiling. The Sergeant reports to his boss, a nameless “Police Inspector” (Irfan Khan) that all he could get out of Jamal was his name. Irritated, the Police Inspector hooks Jamal up to a car battery, threatening to give him electric shock. He asks how he cheated on Millionaire. Jamal refuses to talk. They give him a round of electricity after which Jamal immediately passes out. The cops bicker among themselves about how they used too much juice. The Police Inspector says that Jamal must have cheated. No contestant, not even the smartest doctor or lawyer, has ever won more than 60,000 rupees. Jamal, a kid from the slums, won 10 million. Jamal suddenly wakes up and says, “I knew the answers.”
Flashback to a scene where dozens of children are playing on an airport tarmac. Among them are a very young Jamal and his older brother Salim (Madhur Mittal). The kids are chased by security guards back into their neighborhood. As the guards give chase, locals are seen washing laundry in the sewage filled river while the streets in the Indian slum are littered with trash. Salim and Jamal eventually get caught by their mom. Salim and Jamal are next seen in a classroom, dressed in blue school uniforms. The teacher throws a book at them for disrupting the class. The book is The Three Musketeers (important later).
Flash forward to the police station. The Inspector shows Jamal clips from his stint on Millionaire. On the show, the host asks the first question for 1,000 rupees about an Indian celebrity named Amitabh.
Cut back to Jamal’s childhood. Salim and Jamal are managing an outhouse/port-o-potty, that customers pay to use. The outhouse is at the end of a long wooden plank, on top of a small hill. Just underneath the outhouse is a large mound of excrement. There’s a paying customer waiting to use the outhouse, but it’s currently occupied by Jamal. Impatient, the customer walks away and Salim is upset at the lost opportunity. Just then, Indian celebrity Amitabh Bachchan (Feroz Abbas Khan) flies into the village in a helicopter. All the residents rush towards the heli to try to get a glimpse of Amitabh. Salim decides to play a prank on Jamal, and uses a chair to trap him in the outhouse, so he can’t get out. The only way out is by plunging into the pile of excrement underneath the outhouse. Resolutely, Jamal takes the plunge and escapes. Covered in excrement, he runs towards Amitabh’s helicopter. As he fights the crowd, everyone around him steps away because of his putrid smell. He’s manages to get the Amitabh to sign a photograph. Still covered in filth, he jumps up in celebration.
Later that day, as Jamal’s mom scrubs him from head to toe, Salim secretly takes the autographed photo of Amitbah to a local shop and sells it. Jamal can’t believe what his brother has done, but Salim just says he got a good price and walks away.
Back in the police station, the Inspector has set up a TV where he and Jamal watch clips from Jamal’s stint on the game show that had been televised earlier that day. The next question is what is India’s most famous national phrase? Jamal doesn’t know and is forced to use a lifeline - Ask the Audience. As they watch the clip, the Inspector can’t believe that Jamal doesn’t know the answer. Even a 5 year old could answer that question, he says. Jamal responds by asking the Inspector if he knows who stole a bike that’s been reported missing. Jamal knows, the entire neighborhood knows, and even a five year old knows who stole the bike, but the Inspector doesn’t.
Back on the game show, Jamal has successfully used his lifeline to answer the question. The next question, for 4,000 rupees, is about the Hindu god Rama.
Flashback to childhood. Jamal and Salim are playing in a small pool of water that their mom is using to wash laundry. Suddenly, an angry mob of men appear and attack the locals for being Muslim. The mob quickly gets violent, beating locals with sticks and lighting houses on fire. Meanwhile, the cops don’t intervene. Instead, they’re seen playing cards and telling the locals to piss off.
Flash forward to police station, Jamal tells the Inspector he wished he didn’t know the answer to the question about Rama, because if it weren’t for Rama and Allah, he’d still have a mother -- implying that his mom died in hands of the unruly mob that day. But he does know and he gives the right answer to the question.
On the game show, they’ve cut to commercial break. During the break, the game show host tells Jamal he’s gotten lucky so far, and suggests he take the money and walk away.
Flashback to childhood, Jamal and Salim find shelter from the mob in a small wooden hut. Outside, there’s a torrential rain. A small girl, around Jamal’s age, is sitting outside in the rain. Jamal invites her to their shelter. Her name is Latika (Freida Pinto), and she’s just lost her father. As they sleep in the shelter, Jamal is haunted by the loss of his mom.
Back on the game show, Jamal decides to play on. The next question is who wrote “Darshan Do Ghanshayan”?
Flashback to childhood, Jamal, Salim, and Latika have now become friends, and have set up a makeshift tent in a large garbage landfill. As Latika is picking for trash, three men approach the tent. One of the men, Maman (Ankur Vikal) offers Jamal and Salim cold bottles of Coca-Cola, which they drink heartily. Thinking Maman a saint, the three kids accept his invitation to come with him. He takes them to a camp full of other lost children.
At the camp, the kids get to eat a big meal, and then are asked to sing for Maman. Maman promises to train each child and eventually make them a star. Salim gets into a fight with Jamal, after Jamal laughs at his attempt at singing.
Later in time, Jamal and Salim are driven by van to a place under an expressway where another group of homeless kids are living in squalor. Salim takes a baby from the group of kids and takes it back to the men in the van. Jamal tries to stop him, but Salim insists that “babies pay double.” Jamal, Salim and others then go to the streets to beg for money.
That night, as Salim is sleeping, Latika crushes a handful of chilies and puts them down his pants. Salim wakes up frantic and rushes to the bathroom to wash off the burning chilies, as Latika and the other kids laugh and repeat “chillies on his willy!” Salim swears to get back at Latika for the prank.
More time passes and a boy from the camp is asked to audition for Maman. By now, Salim has become one of Maman’s trusted assistants and he watches on. The boy has sung well and Maman tells him he’s now “ready.” The next thing that happens is one of Maman’s thugs douses a handkerchief with gasoline and covers the boy’s face with it, until he’s unconscious. The men lie the boy on a table and pour scalding hot water on his eyes, so that the boy become blind. (Later on, we discover that the boy is to be put to work singing and begging on a subway platform. They’ve blinded him because blind beggars are given more money by passers by than children who can see.)
Witnessing this, Salim becomes sick to his stomach and throws up in the bushes. When he’s recovered, Maman orders him to get Jamal, the next “auditioner.” Salim hesitates and Maman tells him he has to make a choice -- Jamal or him.
Meanwhile, Jamal is telling Latika all of his plans about escaping to a better life. He thinks that all he has to do is sing good enough and Maman will give him a good life. Salim appears and tells him its time. He takes Jamal to Maman as Latika follows behind.
Jamal starts singing but stops abruptly and demands 50 rupees. He’s a professional now and deserves to be paid, he says. Amused, Maman pays him and Jamal sings on. Maman quietly orders Salim to prepare the handkerchief. Salim grabs the gasoline but abruptly throws it in Maman’s face. He tells Jamal to run. Jamal, Salim, and Latika all run away as Maman and his men give chase. They run to a train that has just started moving. Jamal and Salim jump onto the train. Latika is right behind them, and Salim grabs her hand, but lets go of her, making it look as though her hand slips, and she doesn’t make it onboard. Jamal and Salim look on as Maman grabs hold of Latika. As the train speeds forward, Jamal demands that he and Salim go back to get Latika. But Salim tells Jamal what happened to the other boy. In shock, Jamal says nothing, and they stay on the train.
Back in the police station, Jamal explains to the Inspector that blind singers get “paid double.” The Inspector asks what happened to Latika. Jamal says Maman had other plans for her.
The boys are now few years older and making a good living selling trinkets and balloons to passengers on trains. They essentially live on trains, spending time on the roof, sleeping in stowaway cabins, and stealing food. Occasionally they get kicked off by a train conductor but just get on the next train.
Eventually, they reach the Taj Mahal. There, they discover a whole new racket.