Gopi and Hari, two unemployed graduates, share a room and live together in Madras. While Gopi is looking for a job, Hari aspires to become a music composer in the film industry. They both manage to make ends meet with the help of their friends. Their neighbour is Prabhu, a college-going student who spends all the time in smoking, painting and singing. A new family relocates to their apartment. The couple have a daughter Maha. Prabhu and Maha both study in the same college and become good friends. Prabhu decided to apprentice under a Veena expert. Much to his disappointment, the expert dies before he joins the class.
Gopi takes tuition for Maha and they both fall in love. During this time, Gopi, Hari, and Prabhu get arrested for some reason. Maha pledges her chain and takes them out on bail. In an attempt to reform, Prabhu goes to meet his college principal, but gets dismissed from the college. He gets scolded by his father, but Maha becomes very supportive to him. Prabhu assumes that she loves him. During this time Maha's parents force her to discontinue her tuition as a few of their relatives suspect she and Gopi are in love with each other. Hari gets a break in films and gets an advance payment of money from the producers. Using the sum, they return Maha's chain. By this time, Maha's parents start looking for a groom for her.
Maha meets Gopi and advises him to find a job so that they can marry. Things start to take a turn for the worse when Hari is dropped from the film because the financier of the film is not convinced that having a newcomer is a good idea. The house owner expels Gopi and Hari from the house for not paying the rent. A dejected Gopi and Hari seek shelter with Mani, a rickshaw puller. Gopi gets a telegram informing that his father is dead. To bear his travel expenses, Mani's son Singam goes out, but meets with an accident. Hari tries to get some money by playing music in the streets but is hardly able to make it. Gopi approaches a moneylender to borrow money. The moneylender talks ill about Singam which makes Gopi angry. In a fit of rage, he stabs the moneylender and takes away the money. When he arrives, he is informed that Singam is dead.
Meanwhile, Maha's parents arrange a marriage for her. When she meets Prabhu, he confesses his love for her. A shocked Maha informs him that she never loved him, but only loves Gopi. Prabhu gets disappointed and feels life has ditched him as every single moment. He tries to molest Maha but is stopped when she takes a knife and threatens that she will kill herself. Prabhu feels guilty and takes the knife and stabs himself to death. By this time, Gopi arrives at her house and informs her that he has killed the moneylender for money. They both go a step ahead and marry each other. The next day they are arrested for Prabhu's murder. Hari throws his harmonium in the sea and becomes mad.
The main theme of the film was unemployment. It revolved around the lives of four youngsters – Gopi, Hari, Prabhu, and Maha. Despite obstacles they all have a passion to pursue their dreams. According to G. Dhananjayan, these characters are the shadows of youngsters of the society. Manivannan joined Bharathiraaja's unit as an assistant in the film. He scripted the story and co-wrote the film with Bharathiraaja. The film's cast, principal cast in particular – Ravi, Chandrasekhar, Raadhu, and Rajasekhar – completely featured newcomers. Ravi, was earlier asked to audition for Bharathiraaja's previous film Niram Maaratha Pookkal (1979) as a dubbing artist for the lead character. However, since Bharathiraaja himself dubbed for character, Ravi was dropped. Bharathiraaja, however, signed up Ravi for Nizhalgal as the lead actor, thus marking Ravi's cinematic debut.Nizhalgal Ravi as Gopi
Raadhu as Mahalakshmi (Maha)
Chandrasekhar as Hari
Rajasekaran as Prabhu
Suvitha as Poongothai, also Prabhu's sister
Manivannan as Mani
Janagaraj as moneylender
K. K. Soundar as Gopi's father
Kaja Sheriff as Singam
P.R.S Ramasamy as Maha's father
Charu Haasan (special appearance)
Ilaiyaraaja (special appearance)
R. K. Kumar (special appearance)
The film's soundtrack and background score were composed by Ilaiyaraaja. The album features the song "Ithu Oru Pon Malai", which marked the beginning of lyricist Vairamuthu's career in the film industry. The musical album was highly successful during its release. The song "Madai Thiranthu" was later remixed by Yogi B and Natchatra in their album Vallavan. A remix version of "Idhu Oru Ponmaalai" is featured on music artist M. Rafi's album Aasaiyae Alaipolae.
The film was released on 6 November 1980 to critical success. The film's story, music and cast's performance was well received. Ravi's performance was well appreciated; he got the tag "Nizhalgal" prefixed to his name later. The performance of the other cast members including Raadhu, Chandrasekhar, Rajasekhar too received critical acclaim. The film was released along with K. Balachander's Varumayin Niram Sivappu, another film which focused on unemployment. While Varumayin Niram Sivappu was both critically and commercial successful, Nizhalgal failed at the box office.
At the International Film Festival of India in 1981, Nizhalgal was one of the 21 films to be screened at the Indian Panorama section. It was one of the two Tamil films to be screened at the festival; the other being K. Vijayan's Doorathu Idi Muzhakkam which was released the same year.
Made in the neo-realistic style, the film was a different attempt by Bharathiraaja. The French film critic Yves Thoraval in his The cinemas of India stated: "a gloomy and violent film despite musical scenes with pretty dancers in short skirts." In 2008, Short filmmaker R. V. Ramani in an interview with The Hindu recalled Nizhalgal as being a film that made a strong impact on him. He further called the film as a path breaking one in Tamil cinema.
In a 2015 interview, Bharathiraaja noted, he had to return to mainstream filmmaking as the failure of Nizhalgal forced him to stop making films of the same kind.
At the Tamil Nadu State Film Awards (1981), Nizhalgal won two awards – Best Music Director (for Ilaiyaraaja) and Best Male Playback (for S. P. Balasubrahmanyam).