Anantaram is a film that develops through a commentary by Ajayan (Ashokan) about himself in the first person. Later he tells another story about his life with the same background. Finally both these stories fuse together.
Ajayan was born an orphan and brought up by a doctor. A brilliant child, Ajayan grows up into an introvert and confused youth. The beautiful Suma (Shobhana) arrives at their house after marrying Balu (Mammootty), his foster-brother. Ajayan gets sexually attracted to his sister-in-law at first sight, creating internal conflict within him that leads him to leave the house.
In the second story, Ajayan narrates his confused youth and about the beautiful girl, Nalini, who enters his life. Ajayan's mind shifts often between reality and an imaginary romantic world. Finally, both these stories converge to a point where both Nalini and Suma become a single entity.