Sathyam begins with Sathyam (Vishal), an assistant police commissioner rescuing a hooligan from encounter thirsty cops, only to arrest him later. He reminds his fellow cops that a cop's duty is to kill crime not criminals. Sathyam meets his first challenge in tracking a mysterious killer of three ministers. In the process, he finds the culprit Manickvel (Upendra), only to receive a rude shock to know his identity.
For, the murderer is none other than a former police officer, who inspired Sathyam to take the cop job. Revealing the reason behind his change of mind, the ex-cop says that he is on a killing spree as he failed to set right things in khakhi uniform.
Sathyam, who throws a challenge at his mentor that he would use the power of law to put the wrongdoers behind the bars, vows to throw light on the illegal activities of the Home minister (Kota Srinivasa Rao), who aims at the Chief Minister post.
In the meantime, the protagonist also has a romantic episode with Deivanayaki (Nayantara), a TV journalist. This begins with Deivanayaki suing the locality's children through their parents. The children swear vengeance through a 'gangleader' who happens to be none other than Sathyam himself. The 'gang' succeeds by making their rival a laughing stock with multiple pranks. Nevertheless the female does recognize Sathyam's tenderness at heart and falls for him. Sathyam too falls in love thereafter.
During his attempts to establish truth, Sathyam faces various troubles. He realises power may come as a hindrance in a successful cop's path to victory. However, he proves that truth alone will triumph always.