[2][3] Produced by M. M. Ramachandran and scripted by M. T. Vasudevan Nair, it was an adaptation of a sub-story told by Vedavyasa to Yudhishthira in the epic Mahabharatha.

The rajguru was now living at the outskirts of the kingdom's capital Champapuri to desuade his own son, Chitrangadan, from unwanted activities.

Chitrangadan was a rebel who did not follow his father's footsteps and was bent on breaking the social norms laid down by the society at that time.

However, one night, the rajguru gets a vision from his own guru that to bring rains to the kingdom, the rituals were to be performed by Rishyashringa, the young son of the great sage Vibhandakan.

Accompanied by her mother, Malini, and her companions, Vaishali sets off for the forests where Rishyashringa lived via the Kaushiki river.

However, Vibhandakan again senses something fishy and rebukes his son for not following the routine rituals and instead frolicking around like an aimless man even after innumerable warnings.

However, he senses something dreadful and realises that whatever happened to him till that point was a mere illusion and was bent on placing a curse on Vaishali by accusing her of being a demon in disguise.

As Vaishali and her mother try to step into the ritual podium to claim their rights, the rajguru and the soldiers block them to prevent their entry.

However, they were hesitant due to the parallel cinema tone to the subject matter, but finally Atlas Ramachandran agreed to produce the film.

[3] All lyrics are written by O. N. V. Kurup; all music is composed by Bombay RaviThe film was commercial success, completing a 145-day run in theatres.

[8] In a trade analysis by written by Sreedhar Pillai and published in India Today on December 31, 1988, he wrote that Vaishali had "broken several box office records".

[9] A critic from Chandrika wrote, "As far as films based on the Mahabharata are concerned, Vaishali is a breath of fresh air."

[10] Writing for Screen India, a critic wrote, "M. T. Vasudevan Nair's narration of the episode brings it startlingly into focus as a topical event complete with the intrigues, manipulations and trickery one associates with statecraft Nair's dialogue is full of present-day punches and relevant connotations, the telling social comments, the offers through many of the characters in the film reveal the masterly touches of Malayalam cinema's most highly priced scriptwriter."

"[11] On 24 August 2018, Litty Simon of Onmanorama termed the film "a cult classic" and wrote, "Envy, revenge, love, seduction, a curse and its alleviation -- what more can you ask of a story?

"[3] In 30 July 2008, on the event of Bharathan's tenth death anniversary, P. K. Ajithkumar of The Hindu called Vaishali one of Malayalam cinema's "prettiest."

[12] In December 2020, Neelima Menon from The News Minute called Vaishali "a timeless work of art" and wrote, "Bharathan is a proven wizard in outlining the man-woman relationship in all its sensuality.