A young apprentice ninja named Kanzo Hattori is sent from his home in the Iga mountains to the bustling modern city of Tokyo, which he knows as Edo, for his final training mission. His father, Jinzo Hattori, gives him a strict rule to follow: he must choose one person to be his master and protect them with his life, but he must never allow anyone else to see him. If his presence is discovered, he will be banished from the Iga clan forever.

Upon arriving in the unfamiliar metropolis, Hattori, a pure-hearted and highly skilled ninja who speaks in archaic Japanese and is baffled by everyday items like rice cookers and neon lights, meets Kenichi Mitsuba, a shy and introverted nine-year-old boy who struggles with feelings of isolation and is not popular at school. Hattori declares Kenichi his master, and the two form an unlikely friendship. While Hattori teaches Kenichi lessons in confidence and self-defense, Kenichi helps the bewildered ninja navigate the complexities of 21st-century life. Kenichi has a secret crush on a kind young woman named Midori, who is an artist and blind, a fact that allows her to interact with Hattori without technically seeing him, making her the only other person who knows of his existence.

The peace is soon disrupted by a series of strange attacks; people are being found unconscious with no visible injuries, each victim bearing a tattoo of the rival Koga Ninja clan crest and a throwing knife left beside them. Hattori discovers that the new teacher at Kenichi's school, Sato Sensei, is actually his old rival, Kemumaki Kemozo, a ninja from the Koga clan. When Hattori confronts Kemumaki with a dart from the crime scenes, Kemumaki denies involvement, explaining he has left the Koga clan for good and identifying the weapon as belonging to a deadly rogue ninja named Kurokage, who uses venomous darts.

The situation escalates when Kurokage kidnaps Kenichi, forcing Hattori to break his most sacred rule to rescue his young master. He tracks the rogue ninja to his hideout, where a tense and close-quarters battle ensues. In a surprising turn, Kemumaki arrives and chooses to join forces with his former rival to defeat the common enemy. Impressed by the bond of friendship and loyalty between Hattori and Kenichi, the dying Kurokage hands over a scroll from the Koga clan containing the antidote for his poison before setting his own hideout on fire.

Hattori escapes with Kenichi but, having been seen by others, believes he must honor his father's decree and return to Iga to face exile. Before leaving, he gives the antidote scroll to Kemumaki to save the other victims. He bids Kenichi a final farewell, urging him to be friends with anyone who can understand and support each other. However, when Hattori returns to his father and confesses his failure, Jinzo Hattori forgives him, recognizing that he has learned a more important lesson about humanity than any ninja rule could teach. Hattori is allowed to return to Tokyo, where he joyfully reunites with Kenichi, having found not just a master, but a true friend.