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Nagavalli is a supernatural thriller; its story revolves around characters living in a house in Tirupati. After a family member receives a Nagavalli portrait as a prize in the Nagavalli Dance competition, various characters start having abnormal experiences. In order to save themselves and unfold the mystery, the family looks to Ramachandra Siddhanthi and Dr. Vijay.
The story starts off with an ancient painting of Chandramukhi alias Nagavalli (Anushka Shetty), distributed as a prize to bharathanatyam dancer Gayathri (Kamalinee Mukherjee), her husband and her family. Gayathri lives in a palatial house in Tirupathi with her husband, father Shankar Rao (Sharat Babu), mother Parvathi (Prabha), sisters Geetha (Shraddha Das) and Gowri (Richa Gangopadhyay), maternal uncle Appa Rao(Dharmavarapu Subramanyam), his wife and maternal cousins Pooja(Poonam Kaur) and Hema(Suja) happily.
Few years later, Gayathri and her Husband are shown to be dead. However, at the Engagement day of Gowri,youngest of the three sisters of Gayathri,one of her friends had fainted by encountering a huge thirty-feet Snake/Serpent, and the bridegroom/fiancé had ran away from the family house fearing of something. All strange incidents happen as the family called for a snake charmer to the house, but the snake charmer had died when he attempted to make the serpent appear. The members of the family are psychologically affected by the presence of Chandramukhi's painting and things have not been going well in the house.
They decided to contact Acharya Ramchandra Siddhanthi (Avinash), an astrologer cum sage. The father of the three daughters had told the people and the Acharya that Gayathri and her husband died suddenly after the bharathanatyam competition. The Acharya takes the help of Dr Vijay (Venkatesh), a psychiatrist, to solve the problem. All directions point to the huge portrait of Chandramukhi, and is observed that the portrait is the cause for this. So the father had warned everyone to not go to the outhouse or to the room where Chandramukhi's painting is. At first both Achrya and Dr. Vijay suspects Geetha due to her strange behaviour. One night, Dr. Vijay goes to the outhouse as he heard anklet sounds, and there was another smaller portrait of Chandramukhi in the outhouse and the Doctor wondered how this portrait of Chandramukhi had come here, and it was revealed that Gayathri is still alive, but became mad after the truck accident in which her husband died while he was carrying the painting of Chandramukhi, and that she said that no one accepted to marry the second daughter Geetha because Gayathri was mad and so Geetha vowed that she wouldn't marry, and since they didn't want Gowri's situation to be like this, they lied saying Gayathri was dead. In a few occasions, someone attempted to murder the Acharya twice. Suspecting Gayathri, the acharya asks the family members to bring Gayathri to the temple and that he will show everyone that Chanramukhi is in Gayathri's body, but as Gayathri stepped the temple, all animals were running out of the temple.
Suspecting each and every person in the family, Dr. Vijay starts to investigate everything so he goes to the library to read a book based on Raja Sri Sri Sri Nagabhairava Rajshekhara 's life and further information on Nagavalli too. The investigation also takes back to around 125 years when Raja Sri Sri Sri Nagabhairava Rajshekhara (Venkatesh) used to live and how his enmity with Chandramukhi has been going on since centuries, and was revealed that he had attempted to escape as one of his men had spread a dirty rumour about him, which caused the whole Dominion and the people to go and slaughter and assassinate him... but the book didn't tell if he got assassinated, or if he really committed suicide or if he is alive. Dr. Vijay finishes reading the book and whilst signing the ledger, he reads the name above him: Chandramukhi... and he understands that she had read the book before he had. To further investigate about Chandramukhi, Dr. Vijay goes to Chandramukhi's place and an old man told the Doctor that Chandramukhi's family died back at around a hundred years and told him that he was the second person to enquire about Chandramukhi's family, and as the Doctor asked who that person was, the old man told him that a girl came and inquired about Chandramukhi, and he also says that she was fine whilst asking the questions, but when she returned from Chandramukhi's place, she was holding a portrait of Chandramukhi and ran away like a mad girl, so the Doctor goes to Chandramukhi's house and realizes and understands that the portrait in the outhouse was the portrait of Chandramukhi which had been taken, as he glanced at an empty wall with a rectangular marking outline.
Dr. Vijay also investigates about Gayathri's husband's death and the snake charmer's death, and he comes with information that the snake charmer's death and Gayathri's husband's death had nothing to do with Chandramukhi. Dr. Vijay reveals that Sri Sri Sri Nagabhairava Rajshekhara is still alive when he printed out an astrological profile of his and when the Acharya told Dr. Vijay that this person can still be alive. So Dr. Vijay goes to the Fort/Cage where the crumpled Raja is, and at the time, the Acharya performs a pooja to try to bring Chandramukhi out of Gayathri's body. The Doctor luckily escapes from the invincible Raja, and when the Acharya asks for Gayathri's name, she says her name as Chandramukhi Gayathri, but is revealed that she is still mad, but not affected by Chandramukhi. Dr. Vijay comes back to cure Gayathri from her madness, and he succeeds, but the problem of Chandramukhi is not finished yet, and he knows who is affected by Nagavalli. Later the Doctor reveals to everyone that Gowri is affected by Chandramukhi as he makes her angry and change personality from Gowri to Chandramukhi in front of everyone, then she swoons after she returns to her normal position. Then later, he explains to everyone that Gowri had written both the names while she signed the ledger: Gowri in English when she was borrowing the book, Chandramukhi in Tamil when she was returning the book, and that it was also her who scared the bridegroom away on the Engagement day and sat downstairs like as if she didn't know anything. In order to know more about Chandramukhi's lover Gunashekharan, she went to Chandramukhi's house as Gowri, and returned with Chandramukhi's photo, completely as Chandramukhi.
Afterwards Gowri goes to the cage/fort where Nagabhairava Rajshekhara is, to kill him. Dr. Vijay, knowing Gowri would have definitely seek revenge goes to the cage/fort where the Raja almost gets burnt to death, but he survives when it starts to rain, then Dr. Vijay has a battle with him, and the Raja almosts decapitates Gowri/Chandramukhi, but before he does so, a bolt of lightning strikes the sword and it reduces the Raja to ashes, and it is the end of Raja Sri Sri Sri Nagabhairava Rajshekhara's story. Gowri is no more affected by Chandramukhi anymore and is going to marry the bridegroom she scared away, and Geetha is going to marry too and it all comes to a happy ending.
Daggubati Venkatesh as Dr. Vijay / Sri Sri Sri Naga Bhairava Rajshekhara
Anushka Shetty as Chandramukhi alias Nagavalli (past)
Richa Gangopadhyay Gowri / Chandramukhi (present)
Shraddha Das as Geetha
Kamalini Mukherjee as Gayathri
Poonam Kaur as Pooja
Suja Varunee as Hema
Sharat Babu as Shankar Rao
Prabha as Parvathi Devi
Avinash as Acharya Ramachandra Siddhanthi
Dharmavarapu Subramanyam as Appa Rao
Rajnikant(cameo) as Dr.Eeshwar(cuts from Chandramukhi
Produced by Bellamkonda Suresh
Written by P. Vasu
Music by Gurukiran
Cinematography Shyam K. Naidu
Edited by Marthand K Venkatesh
16 December 2010