"My Big Sister Lives in a Fantasy World" centers around Yuichi Jinno, a high school student whose life takes a bizarre turn due to his eccentric older sister, Mutsuko. Mutsuko, a self-proclaimed "chosen one," believes she lives in a fantasy world filled with supernatural beings and grand destinies. Her delusions often drag Yuichi into chaotic situations, as she insists he is her loyal companion in her imagined battles against evil forces. Despite her over-the-top behavior, Mutsuko is highly intelligent and protective of her brother, often using her sharp wit to navigate their misadventures.

The narrative unfolds as Yuichi becomes entangled in a series of strange events at school, where he encounters classmates who may or may not be connected to Mutsuko's fantastical worldview. Among them is Sanae Hasegawa, a quiet and reserved girl who harbors a crush on Yuichi, and Aiko Takamizawa, a cheerful and outgoing classmate who becomes a close friend. The story explores the blurred line between reality and fantasy, as Yuichi struggles to discern whether the bizarre occurrences around him are figments of Mutsuko's imagination or genuine supernatural phenomena.

As the plot progresses, Yuichi discovers that some of Mutsuko's claims might hold a grain of truth. The series delves into themes of sibling relationships, the power of imagination, and the challenges of navigating adolescence. Mutsuko's antics often serve as a catalyst for character development, pushing Yuichi and his friends to confront their fears and insecurities. The dynamic between Yuichi and Mutsuko is central to the story, blending humor, heartwarming moments, and occasional tension as they navigate their unconventional lives.

The manga balances comedic elements with darker undertones, creating a narrative that oscillates between lighthearted absurdity and moments of genuine emotional depth. The supporting cast, including classmates and other acquaintances, adds layers to the story, each contributing to the overarching mystery of whether Mutsuko's fantasy world is entirely fictional or rooted in a hidden reality. Through its exploration of family bonds and the complexities of perception, "My Big Sister Lives in a Fantasy World" offers a unique blend of comedy, fantasy, and slice-of-life storytelling.