The story of Koyla is set on a background of coal mines. The supreme emperor of which is Raja (Amrish Puri). The innocent people look up to Rajasaab and workship him like a God. But the monstrous, two faced Raja alongwith his eccentric brother Brijwa (Salim Ghouse) secrectly terrorize, kill and rape those very people. Shankar (Shah Rukh), who is swifter than hunting dogs and faster than a speeding train is a humble and mute servant of Rajasaab and unaware of Raja's evil ways, serves him like a mere slave.

Then one fateful day, Raja's eyes fall upon Gauri (Madhuri) a simple village belle. Driven by lust to prossess her, he conspires to marry her by sending a photograph of Shankar along with a marriage proposal. As fate would have it, Gauri instantly falls in love with Shankar and fantasizes about being his bride. Events progress to the marriage day...When suddenly Gauri spots Shankar's face in the crowds. She snatches the sehra off, and to her horror finds the old wrinkled face of Raja. As she faints, he grabs her and completes the ceremony. Gauri is caged and kept under guard at all times as she never submits to Raja.

One day she tries to hang herself when Shankar breaks into her room and saves her. On seeing him, Gauri breaks down and accusess him for destroying her life. But after learning the truth, she comes to his hut that night. Words are not spoken, but their hearts understand, there she lights a flame in front of the Gods. A flame of love which would envelope them both in fire. Gauri's brother who is based in Dubai learns of her marriage and comes to see her. Gauri, inspite of all the torture, puts up a smiling face.

But Shankar could not hold back any anymore. He stops her brother from leaving and tells him everything. But his attempts to rescue his sister goes in vain, he is killed. But while dying he turns to Shankar and pleads for him to take his sister away from that hell. In an instant all the years of torture, slavery and pain focus onto his love he turns to Raja in a frenzy of rage, rises like a volcano, grabs the hand of his lover and runs away with her. Helicopters, army jeeps, armed gunmen, the Raja uses everything in his power to hunt Shankar and Gauri out of the jungles.

Finally through a trick they fall prey to Raja. The innocent Gauri is shot and Shankar is brutally beaten and thrown off the cliff.