Amarinder Singh had "stabbed the people of Punjab in the back" by saying he would contest from Lambi besides his own traditional seat Patiala, the Aam Aadmi Party (AAP) leader said in a video message.
Lambi is Badal's traditional constituency.
Kejriwal said there had been a "deal" between Amarinder Singh and Badal and so the Congress leader had announced his candidature from Lambi so as to cut anti-Akali votes and thus help Badal win.
The AAP has fielded Jarnail Singh, a former Delhi legislator, from Lambi.
Kejriwal demanded to know why Amarinder Singh was contesting from two assembly seats and why he was challenging Badal directly now when he had never done so in any election until now.
"Once everyone realized that Jarnail Singh's campaign was going great, Badal requested Amarinder Singh to contest from Lambi too so that the anti-Akali votes get divided," the AAP leader said.
Calling the Amarinder Singh-Badal fight a "friendly match", he said: "Jarnail Singh will win no matter what in Lambi... And you will be ousted in such a manner that you will remember for the rest of your life."
The February 4 Punjab election has become a three-way race involving the ruling Akali Dal-BJP coalition, the main opposition Congress party and the AAP, a first-time contestant.