The film opens with a statement from the filmmakers explaining their approach to the problem of filming Gandhi's complex life story:

The film begins with Gandhi's assassination on 30 January 1948, and his funeral. After an evening prayer, an elderly Gandhi is helped out for his evening walk to meet a large number of greeters and admirers. One of these visitors - Nathuram Godse - shoots him point blank in the chest. Gandhi exclaims, "Oh, God!" ("H? Ram!" historically), and then falls dead. The film then cuts to a huge procession at his funeral, which is attended by dignitaries from around the world.

The early life of Gandhi is not depicted in the film. Instead, the story flashes back 55 years to a life-changing event: in 1893, Gandhi is thrown off a South Africa train for being an Indian sitting in a first-class compartment despite having a ticket. Realising the laws are biased against Indians, he then decides to start a non-violent protest campaign for the rights of all Indians in South Africa. After numerous arrests and unwelcome international attention, the government finally relents by recognizing rights for Indians, though not for the native blacks of South Africa.

After this victory, Gandhi is invited back to India, where he is now considered something of a national hero. He is urged to take up the fight for India's independence (Swaraj, Quit India) from the British Empire. Gandhi agrees, and mounts a non-violent non-cooperation campaign of unprecedented scale, coordinating millions of Indians nationwide. There are some setbacks, such as violence against the protesters and Gandhi's occasional imprisonment.

Nevertheless, the campaign generates great attention, and Britain faces intense public pressure. Too weak from World War II to continue enforcing its will in India, Britain finally grants Indian independence. Indians celebrate this victory, but their troubles are far from over. Religious tensions between Hindus and Muslims erupt into nation-wide violence. Gandhi declares a hunger strike, saying he will not eat until the fighting stops.

The fighting does stop eventually, but the country is divided by religion. It is decided that the northwest area of India, and eastern part of India (current day Bangladesh), both places where Muslims are in the majority, will become a new country called Pakistan (West and East Pakistan respectively). It is hoped that by encouraging the Muslims to live in a separate country, violence will abate. Gandhi is opposed to the idea, and is even willing to allow Muhammad Ali Jinnah to become the first prime minister of India, but the Partition of India is carried out nevertheless.

Gandhi spends his last days trying to bring about peace between both nations. He thereby angers many dissidents on both sides, one of whom finally gets close enough to assassinate him in a scene at the end of the film that recalls the opening.

As Godse shoots Gandhi, the film fades to black and Gandhi is heard in a voiceover, saying "Oh God". The audience then sees Gandhi's cremation; the film ending with a scene of Gandhi's ashes being scattered on the holy Ganga. As this happens, we hear Gandhi in another voiceover:

As the list of actors is seen at the end, the hymn "Raghupati Raghava Raja Ram" is heard.

Shooting began on 26 November 1980 and ended on 10 May 1981. Over 300,000 extras were used in the funeral scene, the most for any film according to Guinness World Records.

During pre-production, there was much speculation as to who would play the role of Gandhi. The choice was Ben Kingsley, who is partly of Indian heritage (his father was Gujarati and his birth name is Krishna Bhanji).

• Ben Kingsley as Mohandas Karamchand Gandhi
• Rohini Hattangadi as Kasturba Gandhi
• Roshan Seth as Pandit Jawaharlal Nehru
• Saeed Jaffrey as Sardar Vallabhbhai Patel
• Candice Bergen as Margaret Bourke-White
• Edward Fox as Brigadier General Reginald Dyer
• John Gielgud as Baron Irwin
• Trevor Howard as Judge R. S. Broomfield, the presiding judge in Gandhi's sedition trial.
• John Mills as Lord Chelmsford
• Martin Sheen as Vince Walker, a fictional journalist based partially on Webb Miller.
• Ian Charleson as Reverend Charles Freer Andrews
• Athol Fugard as General Jan Smuts
• Günther Maria Halmer as Dr. Herman Kallenbach
• Geraldine James as Mirabehn (Madeleine Slade)
• Alyque Padamsee as Muhammad Ali Jinnah
• Amrish Puri as Khan
• Dilsher Singh as Khan Abdul Ghaffar Khan (Frontier Gandhi)
• Ian Bannen as Senior Officer Fields
• Richard Griffiths as Collins
• Nigel Hawthorne as Kinnoch
• Michael Hordern as Sir George Hodge
• Shreeram Lagoo as Gopal Krishna Gokhale
• Terrence Hardiman as Ramsay MacDonald
• Om Puri as Nahari
• Bernard Hill bit part as Sergeant Putnam
• Daniel Day-Lewis bit part as Colin, a young man who insults Gandhi and Andrews
• John Ratzenberger bit part as American Lt. Driver for Bourke-White

This film had been Richard Attenborough's dream project, although two previous attempts at filming had failed. In 1952, Gabriel Pascal secured an agreement with the Prime Minister of India (Pandit Nehru) to produce a film of Gandhi's life. However, Pascal died in 1954 before preparations were completed.

Later David Lean and Sam Spiegel planned to make a film about Gandhi after completing The Bridge on the River Kwai (1957), reportedly with Alec Guinness as Gandhi. Ultimately, the project was abandoned in favour of Lawrence of Arabia (1962). It was only when co-producer, Rani Dube persuaded Nehru's daughter, Prime Minister Indira Gandhi, to provide the first $10 million from the India Government on the back of which the rest of the film's funds were raised that the film became possible.

Reviews were broadly positive. Many years later the movie received an 85% "fresh" rating on the Rotten Tomatoes website. Ben Kingsley's performance was especially praised. Historian Lawrence James was one of the few who took a more negative view of the film.