In the book, the first-person narrator and quiz show contestant is named Ram Mohammad Thomas. He was abandoned at birth in the clothing bin of a Catholic church in Delhi, and raised for eight years by a benevolent English priest named Father Timothy. His surname comes from a family that adopted him for three days before giving him back to the church. Local religious leaders suggested his first and middle names, on the theory that his birth parents might be either Hindu or Muslim. Father Timothy and the Catholic Church do not appear in the movie, nor does Delhi.
When Father Timothy is murdered by another priest, Ram is sent to a juvenile home, where, as the only boy who speaks English, he becomes the leader of the 150 residents.After one year, a new resident Salim Ilyasi, age seven, arrives as an orphan when a Hindu mob murders his Muslim family. They become best friends.
In the movie, Salim Malik is Jamal's older brother, and both boys are orphaned by the Hindu mob, after which they live as rag children in the Mumbai city dump, rather than in a juvenile home in Delhi. Salim in the movie ultimately plays a sinister and tragic role; Salim in the book leads a charmed life and becomes a movie star.
In the movie and in the book, both boys are taken to a residential music school near Mumbai, where all the children seem to be crippled. They are taught songs of the blind poet Surdas and learn they will likely be blinded when they finish learning the songs, in order to work as blind, singing beggars. The older boy leads an escape, Salim in the movie, Ram in the book.
There is more on-screen violence in the movie than in the book. In the most graphically violent scene of the movie, a young beggar boy is drugged and blinded with acid while unconscious. There is no such scene in the book, although its possibility is suggested.
For three years, from ages eleven through thirteen, Ram works as a daytime houseboy for a retired movie actress in her forties named Neelima Kumari. Her boyfriend batters her, leaving cigarette burns on her breasts, and drives her to suicide, ending Ram's employment.
While working for the actress, Ram lives on the second floor of a Mumbai chawl, sharing a room with Salim. An older girl, Gudiya, whose face Ram never sees, lives next door in the chawl with her drunken father, Shantaram. They can hear through the apartment walls. Shantaram physically and sexually abuses his daughter until Ram pushes him off the balcony to his death, he thinks.
Ram then flees back to Delhi, leaving Salim behind, and finds employment as a houseboy for an Australian diplomat and later as a tour guide at the Taj Mahal in Agra, where he falls in love with a prostitute named Nita who is battered by a customer who leaves cigarette burns on her breasts, similar to Neelima's injuries. The abuser of both women is the same man.
In the movie, Jamal's love interest is Latika, a childhood friend from the slums who is forced into prostitution in Mumbai.
After a separation of five years, Ram bumps into Salim on a Mumbai street. Salim tells what happened during his absence. He encountered Babu Pillai, alias Maman, who had taken them from Delhi to his music school for crippled beggars in Mumbai. They recognized each other, Maman gave chase, and Salim escaped again, onto a bus which was later stopped by a Hindu mob intent on killing all the Muslims on the bus. Salim was saved by a man who brandished a handgun, without firing it, and who then hired Salim as his houseboy. The man with the gun turned out to be a contract killer. By opening his mail and tampering with one of his assignments, Salim managed to save the life of a movie producer and have Maman killed instead. The grateful producer paid for Salim's acting lessons, and got him started in the movie business.
In the movie, Salim, who is Jamal's older brother, not his younger friend, is the one with the gun. Salim shoots Maman when the two of them encounter him together. Salim then goes to work for Latika's pimp and helps to hold her captive until he has a change of heart and lets her escape with his car and cell phone. Salim then shoots the pimp and is killed by his henchmen.
As a bartender in Mumbai, Ram steals the revolver of a dead patron and becomes armed for the first time.
When Ram becomes a game show contestant, it is pure happenstance that most of the questions have answers in his life experiences. When he answers question #12 and wins the billion-rupee grand prize, he is told that question didn't count and the real question #12 will come after the next commercial break.
During the break, both Ram and the host, Prem Kumar, are in the bathroom alone together. Ram pulls out the gun he took from the dead bar patron and reveals that his motive for going on the quiz show was to get close enough to Prem to kill him for abusing the two women in his life: the actress Neelima Kumari, and the Agra prostitute Nita. He loses his nerve, and rather than pull the trigger he offers to spare Prem's life if he tells the answer to the new question #12, which he does.
After winning the grand prize, again, Ram is arrested by police who try to torture him into signing a confession of cheating. This scene is where the book begins. He is rescued from torture by a woman lawyer who calls herself Smita, and who listens to his explanations, given in the sequence of the relevant question number. She then reveals herself to be Gudiya, from the chawl, whose father had suffered only a broken leg when Ram pushed him from the balcony, and who had stopped raping Gudiya after his fall.
Gudiya gets him his prize money, Ram marries Nita, Salim becomes a movie star, and the crippled children are liberated from their imprisonment.
In the movie, Jamal never carries a gun and never shoots or threatens anybody. Salim does the shooting. There is no lawyer, and no Gudiya. Jamal's interrogation is conducted by the police, before, not after, the last question. The police release him to complete the quiz show. The host, Prem Kumar, has no history with Jamal or his women. Jamal's motive for going on the show is to attract the attention of Latika, with whom he has lost contact (despite her being in the custody of his brother Salim). As in the book, he gets the money and the girl.
In the book, the quiz show is called Who Will Win a Billion?, offering a top prize of one billion rupees. In the original real-life quiz show, Kaun Banega Crorepati, the top prize was one crore rupee, or ten million rupees. In the movie, and in the up-dated quiz show, the top prize is two crore rupees, or twenty million rupees.