Awara Paagal Deewana is an action comedy, which revolves around a dentist who accidentally gets trapped into underworld and goes in for a roller coaster ride.

A mafia don (Om Puri) dies and leaves behind such a will which starts an unending war between Guru Gulab Khatri (Akshay Kumar), don's son-in law and Vikrant (Rahul Dev), don's only son. Guru Gulab is married to Vikrant's stepsister Preeti (Preeti Jhangiani). The don's legal will, which also includes diamonds worth hundred crores kept in a foreign bank, has to be equally divided between these three and to claim the diamonds from the bank all three all three have to be present at the bank and personally sign the papers. In event of death of any of the inheritors' death, a death certificate has to be produced to the bank. The will factor vertically splits the gang in two. Vikrant and Guru Gulab become rivals. Vikrant wrongly implicates Guru Gulab in a very serious crime, which forces him to flee out of the India.

Guru Gulab leaves India for America and comes to stay in the neighbourhood of Dr. Anmol Acharya (Aftab Shivdasani). Meanwhile in India, Vikrant announces grand prize money to those who tell him the whereabouts of Guru. Anmol's greedy wife Mona (Amrita Arora) forces him to meet Vikrant in India and inform him about Guru Gulab and collect the prize money.

Anmol comes to India with his father-in- law (Paresh Rawal) and the moment they step into India they are picked up by Choto Chhatri (Johny Lever), who takes them to a local goon, Eaida Anna (Sunil Shetty).

Anna strikes a deal with Vikrant that he'll kill Guru and acquire the prize money offered by him. Vikrant gives him the contract. So Anmol returns, not with prize money but with Anna and Chota Chhatri, and others have this wrong notion that Anna is just interested in the petty contract money. His interest lies in the diamonds worth hundred crores…!!

So this race to reach the diamonds becomes deadlier and all three powers - Vikrant, Guru and Anna clash.

And the rule of this race is to kill the other contestants to win the race!!!