After completing her bloody mission of revenge against the men who murdered her father and brother, Yuki Kashima, known as Lady Snowblood, finds herself alone in Japan at the dawn of the 20th century. The year is 1905, and the country is experiencing the social and political upheaval following the Russo-Japanese War. Yuki has become a hunted fugitive, with authorities well aware of her killing spree. After a final confrontation on a beach where she is overwhelmed by police, she allows herself to be captured, seemingly accepting her fate.

Yuki is quickly tried and sentenced to death by hanging. However, on the way to her execution, her transport is intercepted by agents working for Seishiro Kikui, a foppish yet ruthless high-ranking official in the government's secret police. Kikui offers Yuki a stark choice: be returned to the gallows or become an assassin for the state. Her target is Ransui Tokunaga, a charismatic activist and anarchist who is considered a dangerous enemy of the state. Tokunaga possesses a secret document that exposes the government's corruption, including their involvement in framing and executing innocent citizens to consolidate power. In exchange for retrieving the document and eliminating Tokunaga, Kikui promises Yuki a full pardon.

Yuki accepts the mission and infiltrates Tokunaga's household by posing as a maid. As she observes him, however, she witnesses a man genuinely fighting for the oppressed rather than a simple troublemaker. The anarchist is aware of the suffering caused by the ruling regime, and his conviction begins to erode Yuki's detached acceptance of her role as a tool for the powerful. The situation grows more complex when Ransui reveals he knows exactly who Yuki is, yet instead of fearing her, he asks for her help to get the incriminating document to his estranged brother, Shusuke Tokunaga, a doctor living in a plague-ridden slum.

Faced with the truth about the government's corruption and the righteousness of Tokunaga's cause, Yuki makes a decisive choice. She betrays Kikui and aligns herself with the anarchists. She steals the document and fights to protect Ransui, forcing her to confront the secret police forces she was originally sent to serve. Kikui, unwilling to let the evidence of his crimes surface, unleashes his full force. In a desperate act of brutality, he even unleashes the plague virus into the slums to destroy Shusuke and the evidence.

The conflict forces the Tokunaga brothers to confront their differences, with Yuki serving as the violent bridge between their ideals. As Lady Snowblood, she cuts a bloody swath through the corrupt police forces, ultimately facing Kikui in a final confrontation that allows the truth to potentially see the light of day. By the end, Yuki has transformed from a being born solely for personal vengeance into a woman who chooses to fight for justice on behalf of others, finally deciding her own destiny rather than simply following the bloody path laid out for her at birth.