Farhan Qureshi( R.Madhavan) and Raju Rastogi( Sharman Joshi) are students at the prestigious Imperial College of Engineering( ICE) . Farhan's passion is wildlife photography, but he pursues an engineering degree to appease his father. Raju chooses engineering with hopes of improving his family's financial situation, but his lack of self-confidence results in poor grades. Their third roommate and friend, Ranchodas'Rancho' Shamaldas Chanchad( Aamir Khan), has immense interest in robotics, and invents in his spare time. Rancho regularly faces the wrath of the college's director, Dr. Viru Sahastrabuddhe( Boman Irani), known as Virus, when he gives creative and unorthodox answers in class. He lives by the philosophy that one should pursue excellence, as when it is achieved, success follows. Virus is shown as an extremely strict person—so strict that he caused his own son's suicide by putting him under excess pressure. The star student of their class is Chatur Ramalingam( Omi Vaidya) nicknamed Silencer, known for his incredible techniques of memorisation but more notorious for his silent but malodorous flatulence in addition to his arrogant attitude. Catering for them and the other college students' needs is Man Mohan, nicknamed Millimeter.
Chatur, in an attempt to impress his professors, prepares a speech in Hindi for Teachers' Day. He memorizes the speech without knowing what it means due to his poor grasp of Hindi. Rancho modifies this speech by replacing praise words with obscenities. Chatur memorises and delivers the modified speech, humiliating himself, Virus, and the Minister of Education. He vows revenge against Rancho, and also vows that he will be more successful than Rancho. Meanwhile, Rancho falls in love with Pia( Kareena Kapoor), Virus' younger daughter, who is a medical student in residency at the city's hospital. Virus tries to break the trio up but despite the challenges they face, the three manage to stand firm.
The three friends continue to frustrate Virus, although Rancho continues to score highest in every exam, while Chatur is always second, and Farhan and Raju are inevitably in the lowest two positions. The tensions escalate years later when they drunkenly break into the Virus' household at night to allow Rancho to profess his love to Pia, while Raju and Farhan urinate on the house' door inside the compound. They flee just in time when Virus overhears them in his sleep. The next day, Virus threatens to expel Raju unless he blames Rancho for these wrongdoings. Unable to choose between betraying his friend or letting down his family, Raju unsuccessfully attempts suicide, and ends up in a coma. After intensive care from Pia and his roommates, he recovers.
Farhan and Raju adopt Rancho's outlook after this incident. Farhan decides to pursue his love of photography, while Raju takes an interview for a corporate job. He impresses the interviewers with his frank answers, however they sense his poor upbringing and discuss the company salary. An unsympathetic Virus vows to make the final exam as hard as possible so that Raju is unable to graduate. Pia overhears this, takes Virus' spare keys and gives Rancho details of the exam, before he and Farhan break into Virus' office and steal it. Raju, with his new-found attitude, refuses to cheat and throws the paper away. But Virus catches the trio and expels them on the spot. Pia hears him and angrily confronts him about her brother's suicide, after Virus persuaded him into a career in engineering despite his love for literature. A sobbing Pia then flees to the hospital.
The three friends earn a reprieve when Virus' pregnant elder daughter Mona( Mona Singh) goes into labour at the same time as a heavy storm cuts off all power and traffic. Pia instructs Rancho to deliver the baby in the college common room; he leads his friends and the students restore electricity using car batteries and a power inverter of Rancho's own design. Rancho then delivers the baby with the help.
