King Nisadh of Ayodhya had two sons Nala and Kuvara. Nala wanted to marry Damayanti, the beautiful daughter of king Bhima. Damayanti did not know him, so Nala sent his swan to her. The swan flew to Damayanti's palace and finding her alone in the garden, sang praises of Nala. Meanwhile, King Bhima arranged for her swayamvara, where many princes gathered from whom Damayanti could chose her husband. Damayanti chose Nala and they got married.

When King Nishadh died, Nala became king. He conquered many other kingdoms and became famous. This made his brother Kuvara jealous. He knew gambling was Nala's weakness. Kuvara challenged Nala to a game of dice in which Nala lost everything. Kuvara became the king and banished Nala from his kingdom. Nala went to the forest and Damayanti, who loved him very much followed him. As they walked in the forest, Damayanti injured her feet. Nala did not want the delicate Damayanti to go through hardships with him, so when she was sleeping he left her and went ahead. Further into the forest, he found a snake on the top of a tree that had caught fire from below. As he tried to bring it down, the snake bit him and Nala turned dark and developed a hunchback. Nala asked the snake, "Why did you bite me? I was trying to save your life." The snake said, "I am your father Nisadh. The next twelve years will be full of difficulties for you. I changed your appearance to protect you from your enemies. Whenever you want to get back your original looks wear this ornament."

Nala proceeded to another kingdom. Meanwhile, when Damayanti woke up she found a note from Nala asking her to go to her parents. As she moved ahead, she met a demon that threatened to eat her. Impressed with her fearlessness he came into his real form. He was actually a god, who told her that she would unite with her husband after twelve years. Damayanti proceeded to  Achalpura kingdom where she became the queen's maid. Nala went to the kingdom of Samsumara and became a servant of the king. Many years passed.

One day, King Bhima's men found Damayanti in Achalpura and brought her back to her father. King Bhima tried to find Nala but failed, so he made a plan. He arranged the swayamvaar of Damayanti knowing that when Nala came to know about the second marriage of his wife, he would certainly come to her. King Bhima was right. Nala came with his master, the king of Samsumara. A day before the swayamvara Damayanti saw the dark hunch back servant. She immediately recognised him. Nala also put on the ornament given by his father and regained his original looks. But the swayamvara had been arranged to Damayanti asked him to be present there. On the day of swayamvara she put the garland around Nala's neck and they were united. The twelve-year period was also over. With the help of King Bhima's army, Nala won his kingdom back and again became the king of Ayodhya.

One day, a monk visited Nala's palace and told him the reason why he had to undergo the twelve-year exile. in their previous birth also Nala and Damayanti were king and queen and they had thrown an innocent monk in prison. Their exile was a punishment for their karma of a previous birth.

Eventually, Nala and Damayanti had a son Pushkara. After making him the king, they renounced the world in search of spiritual enlightment.