The film stars Prabhu, Karthik, Amala and newcomer Nirosha, with Vijayakumar, Jayachitra, Sumithra, Tara, S. N. Lakshmi and G. Umapathy in supporting roles.

Ratnam intended Agni Natchathiram to follow Mouna Ragam (1986); he completed the script but chose to prioritise Nayakan.

Agni Natchathiram was produced by Ratnam's brother G. Venkateswaran; it was filmed by P. C. Sreeram, and edited by B. Lenin and V. T. Vijayan.

Agni Natchathiram was released on 15 April 1988, the week of the Tamil New Year festival Puthandu, and became a box-office success, running in theatres for over 200 days.

In Madras, half-brothers Gautham and Ashok are the sons of senior government Indian Administrative Service (IAS) official Vishwanath.

Gautham, a trainee Indian Police Service (IPS) officer, meets the Commissioner's daughter Anjali and they slowly become lovers.

Meanwhile, Vishwanath is appointed head of an inquiry commission to investigate a nefarious factory owner called Chidambaram.

Because Vishwanath is out of town, Susheela helps Kamala bail Ashok and offers snide, unsolicited advice about raising her children to be law-abiding.

Ashok is enraged; he goes to Vishwanath's house and berates him but realises his paternal grandmother has died; Gautham throws him out.

However, when Muktha Srinivasan approached Ratnam to make a film for Kamal Haasan, which eventually became Nayakan, he agreed.

[9] Vijayakumar, who had quit films and had settled in the United States, had returned to India for a different purpose when assistant director K. Subash met and offered him a role in Agni Natchathiram.

[12] To make the film more commercially viable, a comedy subplot involving a middle-aged man (V. K. Ramasamy) and his chauffeur (Janagaraj) trying to cavort with an escort (Disco Shanti) without their wives' knowledge was created.

[32] S. Shivakumar, writing for Mid-Day, called Agni Natchathiram "Mani's loosely scripted work to date" and said; "What emerges on the screen is frothy and cracks like fresh pop corn".

[42] In 2004, Rediff.com appreciated Agni Natchathiram for its "[s]ubtlety, diffused lighting, realistic fights, plain logic, a controlled Prabhu and a livewire Kartik", calling it a "landmark movie which never got the recognition it deserved up north".

[43] In 2018, Rangan called Agni Natchathiram one of the best films in the masala genre, though he noted elements such as the loosu ponnu character played by Amala and the "flashy, MTV-era cinematography" did not age well.