Thalavattam movie is all about Vinod (Mohanlal) who becomes mentally ill after his girlfriend Anitha (Lisy) who dies because of an electric short circuiting accident during a rock concert. Vinod is admitted into an institution managed by Dr. Ravindran (M.G. Soman). With the help of Dr. Savithri (Karthika) who is Dr. Ravindran's daughter, and Dr. Unnikrishnan (Nedumudi Venu), Vinod slowly regains his memory and metal equilibrium.
Savithri and Vinod fall in love. Dr. Ravindran has already arranged Savithri's marriage with Hari (Mukesh), so he opposes the lovers. When he finds that Savithri and Vinod are adamant, Dr. Ravindran performs a surgery on Vinod that puts him into a state of coma. Dr. Unnikrishnan, feels that death would be preferable to this vegetative life and kills Vinod. He confronts Dr. Ravindran and confesses to the euthanasia. Savithri overhears the conversation, and loses her mental equilibrium. She is admitted into the same institution as a patient.