Chhoti Bahen is the poignant story about the delicate but powerful bond of filial love. Rajendra (Balraj Sahni) and Shekhar (Rehman) lose both their parents and the only family left is each other and their younger sister Meena (Nanda). Though in love with Yashoda (Veena), Rajendra swears that he will not marry till his younger brother and sister are settled. Shekhar falls in love with a rich girl Shobha (Shyama). Meanwhile, Meena's marriage is fixed with Dr. Ramesh (Sudesh Kumar). Misfortune strikes when Meena meets with an accident and is blinded forever.

From this point, the entire family begins to unravel. Shekhar, pressed on by an impatient Shobha, marries her and they go away to live with her rich father. Rajendra loses his job and is home. To support his poor blind sister, he is desperate for a job. Will their family ever re-unite? Will Rajendra, Shekhar and their Chhoti Bahen find happiness?