This movie is about the tawaif Sahibjaan, (Meena Kumari), who is born to a courtesan, Nargis (also Meena Kumari). After being spurned by her lover Shahabuddin's (Ashok Kumar) family, Nargis is driven to a graveyard where she gives birth to Sahibjaan secretly. Nargis dies during childbirth and her sister, Nawabjaan, takes the child as her own. Sahibjaan was brought up by brothel madame Nawabjaan (Veena). Unable to break away from the vicious circle, Sahibjaan grows up and becomes a beautiful and popular dancer/singer.
Forest ranger Salim Ahmed Khan (Raaj Kumar) is enthralled by Sahibjaan's beauty and innocence, and eventually convinces her to elope with him, which she does. But trials and tribulations await Sahibjaan as she is recognized by men wherever she goes in the company of Salim. When Salim renames her Pakeezah (pure of heart) and takes her to a priest to be legally married, she refuses, and returns to the brothel. Salim eventually decides to marry someone else, and invites Sahibjaan to dance at his wedding Sahibjaan agrees to this. During this event, the story reveals an exciting turn: Nawab recognises Shahabuddin and calls him to witness the irony of the situation. His own daughter employed to dance and entertain his own family without his knowing.