Karthik Varadarajan (Madhavan) is an independent and free-spirited software engineering graduate establishing a software start-up with his friends. At a friend's wedding, he meets Shakti Selvaraj (Shalini), a student of medicine at Madras Medical College. They continue to bump into each other on local trains that they both use on their daily commute, and fall in love. Karthik pursues Shakti aggressively and proposes marriage; Shakthi, however, is reluctant. Karthik manages to convince Shakthi and requests his parents to formally ask Shakti's parents for her hand in marriage; however, when the parents meet, they do not get along, and Shakti calls off the relationship altogether and leaves for an extended medical camp in Kerala.
While apart, both Karthik and Shakti realize that they are desperately in love and decide to get married without the knowledge or consent of their parents. They continue living separate lives after marriage, meeting outside of their homes and hoping that their parents will see eye to eye at some point in the future and can be informed of the marriage. However, when Shakti's older sister Poorni (Swarnamalya) is on the verge of getting engaged, developments ensue resulting in Shakti's parents attempting to fix her marriage to the groom Raghu's younger brother Shyam (Karthik Kumar). Shakti confesses to her parents and Raghu's family that she is already married; Poorni's engagement is called off and her parents throw her out of the house. Karthik too divulges the same to his parents and is also asked by his father to leave his house.
Karthik and Shakti start living together and while all goes well for a while, they soon find that marriage is not as easy as they expected and living under the same roof results in a large number of conflicts. The marriage gets increasingly tense as both cope with frustrations and disappointments.
Shakti learns that her father is seriously ill and requests Karthik to visit him. Karthik declines, citing her father's hatred of him as the main reason. He eventually agrees, but by the time they reach her house, Shakti' father passes away. Wracked with guilt, the two return home, their relationship taking a turn for the worse.
The two stop talking to each other. Meanwhile, Karthik takes it upon himself to sort out Poorni's love life and her broken engagement to Raghu. He arranges a blind date between the two, which initially fails, backfiring on Karthik, however, with more meetings, Poorni and Raghu become closer. This development takes place without Shakthi's knowledge. Karthik waits until Poorni and Raghu's marriage is confirmed before deciding to tell Shakti. However, Shakti witnesses Poorni hugging Karthik in gratitude at the train station and unable to see Poorni's face, misunderstands what she has seen to be Karthik hugging her sister she assumes he is having an affair with.
Shakthi eventually learns from Poorni of her husband's efforts in getting her married, and is overcome with guilt and love. Karthik sets off on the same evening to the railway station to pick up his wife as is their usual routine. However, Shakti in her rush to get home and make up with Karthik meets with a serious accident. Karthik waits for his wife, and as she fails to turn up searches desperately for her throughout the city, ultimately discovering her in the ICU of a hospital, registered under another name and having undergone brain surgery. Shakti is in a coma.
An IAS officer Ram (Arvind Swamy) admits that he caused the accident and admitted Shakti in the hospital. Karthik is inconsolable, wracked with grief and anger, and takes his frustration out on Ram. However, Ram's wife (Kushboo) intervenes and lets Karthik know that she was the person who caused the accident and injured Shakti, and her husband was merely trying to protect her by taking the blame himself. Karthik observes Ram and notes that he has a lot to learn from the latter. He proceeds to Shakti's bedside and admits that he could have been a better husband. Shakti proceeds to wake up from her coma and the two reconcile, admitting their enduring love for one another.
Mani Ratnam opted to make a romantic film with relative newcomers after his 1998 Hindi film Dil Se.. and signed on small screen actor Madhavan to make his acting debut in Tamil films. Madhavan had done a sandalwood talc ad for Santosh Sivan in 1996 and the veteran cinematographer gave photographs of the actor to Mani Ratnam during the casting process of Iruvar. The director had made Madhavan audition for a role in the film but turned him down citing that "he thought his eyes were too young" and assured "that they would work together some other time". In 1999, Mani Ratnam rang Madhavan up suddenly and told him to "Come down and we will do a photo session. I am starting a film with you", much to the actors' surprise. Mani Ratnam initially wanted to cast a debutant in the lead female role as well and carried out a screen test with Vasundhara Das, before signing on Shalini to play the role in the film in April 1999. Swarnamalya was selected to play the role of Poorni after the director spotted her on a television show and subsequently asked her to screen test for the film. The actress appeared without make-up in the film and also dubbed her own lines. Theatre actor, Karthik Kumar of Evam, also marked his film debut with a minor supporting role as a potential suitor to Shakti. Prior to the release of his breakthrough film Sethu (1999), actor Vikram was approached by Mani Ratnam to play the role of Swarnamalya's fiance in the film but turned down the offer. Television actress Sriranjini made her film debut with this film appearing as Madhavan's sister-in-law while Raviprakash appeared as Shalini's father thus making his acting debut with the film. Venu Aravind and Pondy Ravi appeared as police officers. Mani roped in producer Pyramid Natarajan to portray the character of Madhavan's father. Azhagam Perumal who was one of the assistant directors in the film was chosen to portray the small role of a house owner as Mani was looking for "someone like Jagathy Sreekumar to play the quirky house owner".
The film also required two leading actors to appear in supporting roles with Kushboo roped in to do a role. After considering either Shahrukh Khan, Mammooty or Mohanlal, Mani Ratnam signed Arvind Swamy to play another role, with Alaipayuthey becoming the pair's fourth production together. P. C. Sriram renewed his collaboration with Mani Ratnam after seven years, with the director toggling between Santosh Sivan and Rajiv Menon for his other projects. A. R. Rahman was initially signed on just to compose the background score for the film as the film was originally planned to be "songless", however after a change of heart, nine songs were recorded.
The film began without an official launch, like other Mani Ratnam projects, and it was initially expected that filming would be wrapped up under four months. During the first seven days of the shoot, Mani Ratnam filmed portions featuring Shalini and made Madhavan stay on the sets and watch his process of film-making. The first scene the actor shot was the post-interval scene featuring Shakthi's mother played by Jayasudha. The song sequences Evano Oruvan, and September Matham were shot at Western Plywood Guesthouse and the Dharmadam Island respectively. The team shot at Srinagar in late for 25 days, becoming the last production team to shoot in the area until 2003 as a result of the Kashmir conflict. A "meet the stars" publicity event was held at Music World in Spencer Plaza in March 2000, with the gathering being described as a success. About the production process, Madhavan revealed that he learnt about the technical aspects of film-making from the director and mentioned that he even learned the entire script of the film, irrespective of whether I was in the scene or not, claiming that working with Mani Ratnam inspires that sort of involvement and dedication.
The Hindu cited the film saying, "The wavy movements are not restricted to the title card alone. Alaipayuthey goes backward and forward in time and the movement holds a thin thread of suspense too. The oscillation from joy and levity to seriousness and sorrow creates impressive waves", The lead pair performance was praised saying, "Shalini once again proves that she is a natural performer while Madhavan sails through the litmus test with ease". Similarly Indolink.com mentioned that "Mani's directorial mind and heart sways beautifully like his film" and that the film is "worth seeing with the whole family". However Rediff.com gave the film a middling review citing that the film is "old wine in an old bottle" and that "the only person who scores good marks in the film is P. C. Sreeram", describing "he has used his camera like a paint brush and the strokes are so stunningly beautiful that, once the film is over, one remembers only the visual treat". In regard to performances, the critic mentions that Madhavan "looks pleasant and handsome and does his job splendidly until the end, where he looks totally lost in the most crucial scene" and that Shalini "is very beautiful but not as open as she used to be as a child star".
Alaipayuthey was dubbed and released as Sakhi in Telugu and was later remade in Hindi cinema as Saathiya, by Mani Ratnam's assistant Shaad Ali in 2002, starring Rani Mukherjee and Vivek Oberoi. It was the first time where the director had sold off production rights' of his films to be remade in another language as he had previously opted to dub and release the film himself.
The film began a successful film career for Madhavan and launched him as a "romantic hero". He has since gone on to become a regular part of the cast in Mani Ratnam's productions and featured in leading roles in Dumm Dumm Dumm (2001), Kannathil Muthamittal (2002), Aaytha Ezhuthu (2004) and Guru (2007). Meanwhile, Shalini had already agreed to call time on her career before release due to her pending marriage with Ajith Kumar and Alaipayuthey became her penultimate release. Swarnamalya also received several film offers after her critically acclaimed performance, but consecutive failures of eight of her ten movies since failed to catapult her into the leading bracket of actors. Post-release, the actress had also expressed her disappointment at several of her scenes being edited out of the film. In July 2011, Janani Iyer said she considered a role like Shalini's character from the film as "really challenging". Gautham Menon revealed that the scene prior to the song "Evano Oruvan" was "almost straight out of real life" and that he "tried to incorporate such moments" in his films. The film created an interest for weddings held in temple.
Several other directors have made cultural references to Alaipayuthey, with both scenes and songs being alluded in their films. The scene where Madhavan proposes Shalini in the train was spoofed in Boss Engira Bhaskaran (2010) where Arya tries to do the same with Nayantara but fails. When Madhavan saw that film, he said "It was a pleasant shock to see this clip feature in BEB. It was such a sweet tribute to me. After watching this sequence, I was quite amused to see how thin I was back then!" In Budget Padmanabhan (2000), Vivek speaks to Bhuvaneswari through cups attached with wires. Vivek utters Madhavan's dialogue from the film by mimicking his voice, he then hurts Theni Kunjaramma's eye by singing the film's song. In Shahjahan (2001), Vivek and Kovai Sarala sings "Snegithane" in a humorous vein.
The Hindi Television series Beintehaa was dubbed in Tamil as Alaipayuthe. Songs from the film inspired several film titles - Kadhal Sadugudu (2003), Evano Oruvan (2007), Pachai Nirame (2008), Ragasiya Snehithane (2008) and Endrendrum Punnagai (2013). Posters of Vinnaithaandi Varuvaaya (2010) were inspired from various films including Alaipayuthey.
The music score that accompanies the film was composed by A. R. Rahman. Upon release, the album met with widespread critical acclaim, selling over six lakh cassettes, and went on to win the Filmfare Award for Best Music Director in 2000. The soundtrack features 10 songs composed by Rahman, with lyrics by Vairamuthu, except for the title song "Alai Payuthey" (which was created by the 18th-century Carnatic music composer Oothukkadu Venkata Kavi, who also set it to the raagam Kaanada). The song "Yaro Yarodi" later appeared in the 2008 Hollywood film, The Accidental Husband. The audio rights were sold to HMV. The song "Pachai Nirame" is based on Kharaharapriya raaga.
Karthik worked as chorus singer for the film while Clinton Cerejo made his debut as playback singer. Song "Kadhal Sadugudu" provided major breakthrough for its singer S. P. Charan.A. R. Rahman won Filmfare Best Music Director Award (2000)R. Madhavan won Filmfare Award for Best Male Debut – South (2000)