Karan Shergil (Roshan) is a young man who has no actual goal in mind or plans for his future. He is just the part of the large section of aimless youth of our nation. His father is a businessman; his brother is a successful person living in America, but he is drifting. His girlfriend, Romi (Zinta), a student activist, tells him he needs a goal in life. When a friend announces he is going to join the Army, Karan applies for the Indian Military Academy and is enrolled in the Indian Military Academy despite dissent from his parents.

Karan’s first days at the IMA are a disaster. Because he is undisciplined, he is constantly punished for inattention. He leaves the academy without permission, sneaking over the wall at Last Post. However, the girl he has been pursuing, Romi, breaks off their relationship because he quit. Karan understnads the motive to live a self-respectful life. he returns to the IMA, takes his punishment, and becomes a focused, disciplined cadet leader, graduating as a cadet officer.

Lt. Karan is posted to the 3rd Battalion of the Punjab Regiment, commanded by Col. Sunil Damle (played by Amitabh Bachchan), and becomes a respected officer. From an immature teenager to a mature officer, he now gets to know the essence of his life or his goal – ‘Lakshya’. His journey towards his goal takes him along a path filled with dangers, challenges and difficulty with many lives at stake. Karan encounters Romi, who is a war correspondent, and their feelings for each other become apparent.

Colonel Damle is told by his Brigadier that 3 Punjab has 48 hours to achieve its goal, or it will be relieved. Karan is assigned to a team which will attempt to climb a tall cliff (mentioned at 800 feet at one point, 1000 feet in another) to flank the Pakistani sangars and regain the hill. On the night before the attack, Karan calls his father and the two are reconciled.

Karan then moves on to the hill limping to the top of the mountain, unpacking the Indian tricolor Akbar wanted to carry, and plants it on top of the hill, then fires a flare, to the relieved joy of Colonel Damle. He then returns back home to fulfill his next objective, marrying his girlfriend Romi after a successful self realisation.