Following the events in Nagina, Nigahen is the story of Neelam, the daughter of Rajiv and Rajni. After the tragic car accident of her parents, Neelam is raised by her grandfather Lambodar (Pran) in the city and is finally brought back to her ancestral home in the country, as a young adult (who bears a striking resemblance to her mother Rajni, also played by Sridevi). There, Neelam encounters and falls in love with Anand (Sunny Deol) who, as a child, was kidnapped by Gorakh Nath, a powerful Tantrik who is revealed to be the brother of Bhairon Nath, who tried to reveal Rajni's identity in Nagina. Claiming to have amnesia of the events, Anand woos Neelam, and she falls in love with him. Little does Neelam know that Anand does not have amnesia and is working for Gorakh Nath: the Tantrik has set his eyes on a powerful gem (Mani), which grants the one who possesses it, great powers. The only person who knows its whereabouts is Neelam, who unbeknownst to her, was hypnotized by her late mother's Guardian Snakes into going to the old temple from the original story and locating the gem (an event witnessed by Gorakh Nath).

Ultimately, Anand inadvertently falls in love with Neelam and reveals that he is cursed by Gorakh Nath: If Gorakh Nath ever catches him, he will turn him into a snake and entrap him — hence, Neelam will never be safe with Anand. The story culminates with Neelam inheriting the powers of her late mother. Neelam and Anand fight with and defeat Gorakh Nath once and for all and live happily ever after.