The film is based on a story set in the Chola Empire in year 1083 AD. The titular character in the story is Ambikapathy (M K. Thyagaraja Bhagavathar), the son of the Tamil poet Kambar (Serugulathur Sama) who is in love with the Chola princess and daughter of Kulothunga Chola, Amaravati (played by M. R. Santhanalakshmi). The king objects to their love and insists on testing Ambikapathy's literary mettle before judging his worth. The test given to Ambikapathi is that he should write and sing a hundred poems in the field of Puram (dealing with war and politics). The poems should not have any reference to the field of Aram (dealing of love and romance). Ambikapathi begins the test in the King's court with a Kadavul Vaazhthu (invocation to God). Amaravathi who is keeping the count, mistakes the invocation as a poem and counts it as poem number one.

Sakuntalai is the story of the mythological queen Shakuntala, whose tale is told in the Mahabharata and dramatised by Kalidasa in the play Abhijñānaśākuntalam.