Set in the year 1956, a salaryman and war veteran named Mizuki travels to the remote, isolated village of Nagura. The village is controlled by the mysterious Ryuga clan, a powerful family that secretly influences Japan’s political and financial world through its pharmaceutical company. Mizuki, an employee of the Imperial Blood Bank who is assigned to handle the Ryuga account, arrives under the pretext of paying respects following the death of the clan’s patriarch, Tokisada Ryuga. However, his true mission is to uncover the secret behind a mysterious medicine known as M, hoping to use the information for his own career advancement.

At the same time, a strange white-haired man arrives in Nagura. He is a member of the ghost tribe, the Yurei-zoku, and is searching for his missing wife, Iwako. This man, who later becomes known as Gegerō, is the father of the future Kitarō. As the Ryuga clan engages in a sordid and ugly dispute over Tokisada’s inheritance, a gruesome murder occurs at the village shrine. The outsider, Gegerō, is immediately suspected and detained. Mizuki and Gegerō meet and, despite their mutual distrust, are forced to work together to unravel the dark secrets of the Ryuga family and the horrifying curse that plagues the village.

Their investigation reveals the existence of a subterranean lair known as the Anagura and a monstrous entity called the Kyōkotsu, which is central to the clan’s dark rituals. The narrative explores themes of post-war Japanese greed, desperation, and the cyclical nature of violence. They encounter various members of the Ryuga clan, including the ambitious daughter Otome, her husband Katsunori who seeks to be the heir, the sickly child Tokiya, and the tragic figure Sayo who dreams of escaping the village. As the body count rises, Mizuki and Gegerō confront the true horror of the clan’s quest for immortality, leading to a devastating climax that results in the destruction of the village and the apparent death of Gegerō, who is later reduced to just his eyeball, becoming Medama-Oyaji. Mizuki survives but loses his memory of the events, fleeing the village with Iwako, who is gravely ill.

The story is framed by scenes set in the modern day, where an older Medama-Oyaji returns to the ruins of Nagura with his son, Kitarō, and their companion Neko Musume, to finally confront the lingering remnants of the tragedy from seventy years prior. The Shinsei-ban, or True Birth Edition, is a version of the film with 327 re-edited cuts and re-dubbed audio, intended to present the horror story as the production team originally envisioned. It received an R15+ rating in Japan for more explicit and graphic depictions of violence and gore compared to the original theatrical release.