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Kayam tells the story of Choonda (Manoj K. Jayan) and Thamara (Shwetha Menon). Choonda is a fisherman. He is also the leader of the Kabaddi Team of the village.
Thamara is a native of the neighboring village. She has watched her mother being brutally raped and murdered. Tired with every man out there vying for her body, she flees with Choonda to his village.
Sasikuttan (Bala), leader of another Kabaddi team, contests with Choonda. Choonda realizes that Sasi is his brother from whom he had been separated for long. Sasi realises the truth as well, and stays back in the village. He has also fallen in love with a local girl Muthu (Aparna).