Satsuki and Mei’s mother has taken ill. In order to be closer to her while she recovers in a rural convalescent hospital, their father moves the two sisters from their home in a city to the countryside.
The house they move into is a ramshackle old place in the shadow of an ancient camphor tree. It is infested with little, sooty creatures that live in the eaves of the attic and underneath the floorboards. Granny Ogaki – one of their neighbours – tells the girls that these are ‘soot sprites’, who dwell in empty and forgotten spaces. They are quite harmless and will move on now the house is inhabited again.
Granny’s grandson, Kanta, is intrigued by his new neighbours – particularly Satsuki, with whom he’ll be sharing a classroom – but he doesn’t know how to talk to city girls.
With father working and mother recuperating, Satsuki takes on more responsibility for herself and her sister. And though the countryside is beautiful and the people friendly, it’s hard not to be scared when the wind rustles the trees at night.
As the sisters explore their new surroundings, young Mei encounters magical creatures and the ancient protector of the forest she calls "Totoro" – and they are to be the girls’ neighbours.
The initially sceptical Satsuki refuses to believe her, but before long the two girls are caught up in the creatures’ adventures – transported to a long-forgotten world of spirits, sprites and magic.