A 17-year-old high school student named Iroha Sakayori lives a hectic life in near-future Tokyo, juggling her studies with part-time work to support herself due to a strained relationship with her mother. Her only escape is Tsukuyomi, a popular virtual reality space where she unwinds by watching streams of its top AI creator and administrator, Yachiyo Runami. One night, Iroha discovers a baby emerging from a glowing utility pole. Unable to leave the infant, she takes it home, where it rapidly grows into a teenage girl. Iroha names her Kaguya after the ancient folktale of the moon princess.

Kaguya is a cheerful and chaotic runaway from the moon who finds Earth infinitely more exciting than her boring, task-driven home world. Despite their clashing personalities, with Iroha being disciplined and reserved, they form a bond. At Kaguya's request, Iroha agrees to help her become a live streamer on Tsukuyomi, with Iroha producing music under the name Iro P and Kaguya performing as the singer. As their online collaboration gains popularity, they grow closer, and Iroha begins to emerge from her shell of strict self-reliance.

Their growing success leads them to compete in a major tournament for a chance to collaborate with Yachiyo herself. However, an ominous shadow looms as agents from the moon appear, demanding Kaguya return home. Despite Iroha’s desperate efforts to protect her, Kaguya is taken back to the lunar realm. In the aftermath, a devastated Iroha discovers the shocking truth: Yachiyo is actually Kaguya from the future.

When Kaguya originally tried to return to Iroha, a time distortion sent her 8,000 years into the past instead. Forced to take the slow path back to the present, she lived through millennia, eventually creating Tsukuyomi as a way to reunite with Iroha in the virtual world. This revelation creates a stable time loop, where Iroha singing a lullaby to baby Kaguya becomes the debut song for Yachiyo, who is that same Kaguya after 8,000 years of waiting.

Refusing to accept a bittersweet separation, Iroha dedicates her life to breaking the cycle. She studies engineering and robotics for a decade, ultimately creating a physical android body so that Kaguya, via her Yachiyo consciousness, can live with her permanently in the real world. Together, they achieve a true happy ending, finally closing the 8,000-year loop.