"Kannagi" centers around Jin Mikuriya, a high school student who carves a wooden statue from a sacred tree being cut down in his rural town. The statue comes to life as Nagi, a goddess who claims to purify impurities and protect the land. However, Nagi discovers that her powers are weakened due to the tree's destruction and the spread of impurities in the modern world. She decides to stay with Jin, relying on him to help her regain her strength and fulfill her divine duties.

As Nagi adjusts to human life, her presence disrupts Jin's ordinary routine. Her lack of understanding of modern society often leads to comedic situations, while her divine nature occasionally causes supernatural disturbances. The story explores their growing bond as Jin assists Nagi in her quest to purify the town, often encountering other characters who become involved in their efforts. Among them is Tsugumi Aoba, Jin's childhood friend, who harbors feelings for him and becomes suspicious of Nagi's intentions. Zange, Nagi's twin sister and another goddess, also appears, adding complexity to the narrative with her contrasting personality and motivations.

The series balances slice-of-life humor with moments of introspection, delving into themes of faith, tradition, and the clash between the spiritual and modern worlds. Nagi's struggle to adapt to her diminished powers and her reliance on Jin highlight her vulnerability, while Jin's pragmatic nature and growing attachment to Nagi reveal his evolving perspective on life and responsibility. The interactions between the characters drive the narrative, blending lighthearted comedy with occasional dramatic undertones as they navigate the challenges posed by Nagi's divine mission and the impurities threatening their town.