Diya Aur Baati Hum is the story of Sandhya as she trains as an Indian Police Service officer. She dreams to break the boundaries of her confined existence of middle class values. The story is also about Sooraj, who is a self-made man. Sooraj owns a famous sweet shop near his house.
Sooraj and Sandhya get married under strained circumstances. Sandya struggles with her strict mother-in-law who does not accept that her daughter-in-law could become a police officer. The story shows how a husband becomes his wife's strength and helps her to fulfil her dream. Sooraj gets the title of World's Top Cook. Sandhya completes IPS training and wins the Best Cadet Trophy. The programme now shows her work as an ASP in Pushkar.
Two terrorists come to Sandhya's house disguised as a simple poor woman and Sooraj's helper. They mislead Sooraj and others that Sooraj has to go Dubai. So everyone makes preparations to go to Dubai. Chaturi, Bhabo and Sooraj go to Dubai but their flight was hijacked by Disha-Sooraj's helper, Prema and their head called Baiji(Maya) Rajkumar's sister. Flight 2310 is hijacked while they are on the plane. The hijackers demand for Rajkumar's freedom. They kill 3 people and everyone's lives are in danger. Sandhya manages to capture them with the help of Zakir and Arjun. They kill Maya, Prema and Disha. But unfortunately Bhabo gets shot while she was saving Sooraj. Baba sa blames Sandhya for all this, while Sandhya and Zakir get praised all over the country.
Bhabo's one kidney gets damaged, but is save and comes back home. Sooraj also thinks that Sandhya has done wrong and does not treat Bhabo has her mother. He removes Sandhya out of Rathi house. Bhabho is shocked by Sooraj's decision. Ankur and Ankita take Sandhya to their home. Bhabo makes attempts to reunite Sooraj and Sandhya but fails. Sandhya receives orders to go to Scotland for training. Sandhya with heavy heart decieds to go, so that Sooraj can stay happy.
Meanwhile, Bhabo's health gets deteriorated and other kidney also gets damaged. Doctor tells that Bhabo needs kidney and her kidney transplant must be done immediately. Sooraj and family arrange for a kidney, but Sooraj comes to know that the lady who is going to donate kidney to Bhabo is not doing willingly and her husband was forcing her to do so because of money. Sooraj saves that woman and refuses to take her kindey. The entire family says that he must have thought of Bhabo before doing this. At this point, Bhabo explains to Sooraj that he thought of humanity first and saved the woman, in the same way Sandhya thought of saving all the passengers and the country first as if the terrorists wolud be alive then they would kill lakhs of people. Hearing this, Sooraj and Rathi family realize their mistake. A secret donor donates her kidney to Bhabo.
On Republic Day, Sandhya receives award for her bravery. Soraj goes to take award on behalf of Sandhya and apologizes to Sandhya in front of everyone. Sandhya sees this function on TV and goes to meet Sandhya. Sooraj apologizes Sandhya and brings her back home. Sandhya, after returning to Rathi house is sad and tries to stay away from Sooraj. Ankur plan a trip for Rathi family to Mumbai. At Mumbai, Sooraj notices Sandhya's behaviour and thinks that she is hiding something from him. Then he comes to know that the person who donated kindey to Bhabo is none other than Sandhya. Sandhya takes promise from him to not to reveal this truth to anyone.
Bhabo tells Sooraj and Sandhya to now think of their child. After returning to Pushkar, Sandhya comes to know that she is pregnant. On Holi, Sandhya eats laddoo of Bhang and reveals that she is pregnant. Sooraj is extremely happy by this news. Rathi family rejoices and Bhabho takes extra care of Sandhya. But to everyone's worry, Sandhya develops the disease of sleep-walking and at one night was to fall from the terrace cliff but Sooraj saves her. Bhabo and Sooraj are worried about her condition. Sandhya's doctor reveal that she is going to give birth to twin babies. On Ankur's request, Rathi family moves to his house as his house is save for Sandhya.