"Myriad Colors Phantom World" is set in a near-future world where humanity has gained the ability to perceive supernatural entities known as "phantoms," which are manifestations of human emotions, memories, and fears. These phantoms often disrupt daily life, leading to the establishment of specialized teams tasked with sealing or neutralizing them. The story centers on Haruhiko Ichijo, a high school student with the ability to summon and control phantoms through his drawings, and Mai Kawakami, a skilled swordswoman who wields a phantom blade. Together, they are part of their school's Phantom-hunting club, which also includes Reina Izumi, a girl with the power to absorb phantoms through her legs, and Koito Minase, a mysterious girl with a connection to a powerful phantom.

The narrative explores the team's missions to combat phantoms while uncovering the deeper mysteries surrounding their existence. Haruhiko and his companions encounter a variety of phantoms, each tied to unique human experiences, ranging from playful and harmless to dangerous and malevolent. As the story progresses, the group learns about the origins of phantoms and their connection to the human psyche, as well as the potential consequences of their actions in sealing these entities. The series balances episodic phantom-hunting adventures with overarching plotlines, delving into themes of memory, identity, and the interplay between the supernatural and human emotions. The characters' personal histories and relationships are gradually revealed, adding depth to their interactions and motivations.