Main Prem Ki Diwani Hoon is the story of Sanjana (played by Kareena Kapoor), a girl of today's generation full of life. She lives life on her own terms and gets very upset when her mother Susheela (Himani Shivpuri) arranges for her to see a boy leading to a marriage prospect. Roopa, the eldest daughter, shows Sanjana's photos to Prem's mother who instantly approves of her. She eventually meets Prem Kishen (Hrithik Roshan).

At first she cannot stand him, but eventually they fall in love. Her parents are happy that Sanjana likes him, but suddenly Roopa e-mails to tells them that Prem could not make it so they sent someone else.

Sanjana's confused parents find out that the boy who is here is not the rich N.R.I. Prem whom Sanjana was meant to meet. He is Prem Kishen, an employee in Prem Kumar's company. It gets even worse when the real Prem Kumar (played by Abhishek Bachchan) arrives to meet Sanjana. The meddling mother ousts Prem Kishen, though the father (played by Pankaj Kapoor) has reservations because he sees how much Sanjana and Prem are in love. Prem Kumar likes Sanjana instantly and Sanjana can't believe how much she has in common with him, but Sanjana is now inseparable from Prem Kishen, her true love. He returns to Sundarnagar and reveals during the family photo that his boss is going to get married with his beloved Sanjana.

Trouble ensues; a marriage is decided for Sanjana and Prem Kumar with Prem Kumar's mother's (Reema Lagoo) blessing. Prem Kishen's loyalty to his boss and his boss' happiness forces him to leave and let the marriage go on. Sanjana finally meets her soulmate when Prem Kumar learns the reality and reunites Sanjana and Prem Kishen.