Dharmendra plays Dharam Singh, a conman who together with his son, Gajodhar Singh - played by Bobby Deol - trick some unsuspecting people in Banaras and enjoy their lifestyle. Sunny Deol, who plays Paramveer Singh Dhillon, comes to town and claims to be Bobby Deol's brother.

As Paramveer is accepted into the family, he is quickly used in all the conning. When Gajodhar falls in love with the beautiful Punjabi girl Saheba, portrayed by Kulraj Randhawa, her brothers take her away from him, but Paramveer quickly comes up with a plan to save Gajodhar's love affair.

The movie's director, Samir Karnik, has revealed that the idea of the movie is from the 1975 song Main Jat Yamla Pagla Deewana that was featured in the Dharmendra starrer Pratiggya the same year. The movie's soundtrack is composed by Pyarelal, RDB, Nouman Javaid, Anu Malik, Sandesh Shandilya, Rahul Seth, and Sanjoy Chowdhary.

RDB are making their comeback in Bollywood as they have produced the title track for the film. Nindy Kaur sings the song in duet with superstar Sonu Niigaam. Parichay is making his vocal debut in Bollywood with the release of the house remix of the title song.

After the cast and crew started shooting the movie in Varanasi in April 2010, Dharmendra had to be hospitalized and the film went on a hiatus. In July the same year, Sunny Deol suffered from back pains while shooting a scene and the movie was yet again delayed. Yamla Pagla Deewana is now scheduled to hit theaters on January 14.