Gaali Medula is a tear-jerking tale of a young man Krishna on the lookout for his father. Ranganatham leaves his only son Krishna in the custody of Panakalu before he leaves for his medical treatment. Greedy Panakalu leaves the village with the money given by Krishna's father and buys a piece of land in town. He educates his son Mohan and makes Krishna look after the land. Panakalu also takes money from Naganna as loan, in exchange to make Lakshmi his daughter-in-law. Lakshmi who is in love with Krishna is unaware that she has to marry Mohan. Panakalu accuses Krishna of ruining the marriage plans of Lakshmi and Mohan, which makes Krishna leave the house. Meanwhile, the ambitious Mohan on the pretext of becoming a millionaire meets Nimmi who is the landlord's daughter and marries her. This makes Lakshmi leave the house in search of Krishna. Will the two reunite? And will Krishna be able to meet his father again?