In the ancient village of Shivapuram, little Ananthan hears a tale from his mother, Gayathri (Revathi). She tells him that his family comes from a line of powerful magicians, and they are responsible for protecting nagamanikyam, a jewel on a serpent's head. The jewel, she narrates, lies in a secret place in the house guarded by snakes, including a tiny snake called Kunjootan.
Years later, obeying the wishes of his dead mother, Ananthan (Prithviraj Sukumaran) returns to his ancestral village to light the lamps at Shivakavu, a dark and mysterious temple of Shiva. On his way home he meets the comical Maravi Mathai (Cochin Haneefa) on the train. The local black magician Digambaran (Manoj K Jayan) opposes the lighting of the lamps on the grounds of local superstitions in order get his hands on the nagamanikyam. Disbeliever Ananthan meets the supernatural for the first time in his life.
In his effort to fit into the local environment, Ananthan gradually wins the villagers' hearts over by his easy and kind manners. This appreciation is breached briefly when the magician takes over his mind for a short while. Meanwhile, Ananthan's cousin Bhadra (Kavya Madhavan) falls for him and his light-hearted flirting, eventually leading to a commitment of love between them. At one point, Bhadra faces the dilemma of choosing between Ananthan's love and becoming a Devi (goddess) in a mystical ritual of self-offering.
Chemban (Kalabhavan Mani), a blind martial arts expert, stands in the way of Digambaran's hunt for the nagamanikyam. The evil black magician manages to remove Chemban from his way, and leaves a trail of blood in his wake. Digambaran also lures Chemban's sister and his lover Bhama (Riya Sen). A series of sensuous and evil magical rites follows that features a wide paraphernalia of the exotic, including Kathakali movements, tantric paraphernalia, traditional magic spells, special effects, and black-and-red face paints.
In the end, Ananthan and Bhadra escape Digambaran's sinister tricks and unravel his conspiracy in front of the villagers, who believed him to be a benevolent mystic. The fight at the end sees Digambaran destroyed and Ananthan restoring the nagamanikyam.