Produced by K. S. Rama Rao under the Creative Commercials banner, the film features Radha and Suhasini as the female leads, with Nagendra Babu making his acting debut in a supporting role.

Rakshasudu marked the third collaboration of Chiranjeevi, K. S. Rama Rao, Kodandarami Reddy, Yandamuri Veerendranath, and Ilaiyaraaja, following Abhilasha (1983) and Challenge (1984).

Purusha and Simham resort to stealing the money from a house, but they are caught by J. Krishna Murthy (JK), who surprisingly permits them to keep the stolen amount.

During a confrontation with the rival's men, Purusha is injured and jumps into a river, where he is rescued by Sumathi, a school teacher and an orphan, who also happens to be the sister of Inspector Vijay.

As Purusha recovers, he devises a plan to raid critical documents that would incriminate Sailaja’s father, who is JK's rival.

Rakshasudu marked the third collaboration of Chiranjeevi, K. S. Rama Rao, Kodandarami Reddy, Yandamuri Veerendranath, and Ilaiyaraaja, following Abhilasha (1983) and Challenge (1984).