Gudgudee is the story of Ajay Singh, a middle aged married sales executive with a fertile imagination. He arrives in Bombay from Jaipur for the first time to attend his cousin's wedding. His friend Shekhar has already fired Ajay's fantasies by painting a lurid picture of Bombay and its on-the-prowl girls. So when Chandni, a budding actress who stays next door to where Ajay has put up, starts getting friendly with him, Ajay misinterprets the gesture as love.
But all that Chandni is interested in is the air-conditioner in Ajay's flat. Chandni's electric fan is out of order and her flat is like a furnace. Having heard the reputation of Bombay girls, Ajay's imagination runs riot and he considers it his duty to reciprocate Chandni's love for him. The presence of a novice musician courting Chandni adds to the uproarious confusion.