دوره تایشو در ژاپن است. تانجیرو، پسر مهربانی که برای امرار معاش زغال می‌فروشد، خانواده‌اش را می‌بیند که توسط یک شیطان سلاخی شده‌اند. بدتر از همه، خواهر کوچکترش نزوکو، تنها بازمانده، خود به یک شیطان تبدیل شده است. اگرچه تانجیرو از این واقعیت تلخ شوکه شده است، اما تصمیم می‌گیرد که تبدیل به یک «شیطان‌کش» شود تا بتواند خواهرش را دوباره به یک انسان تبدیل کند و شیطانی که خانواده او را قتل عام کرد، بکشد.

In a world inhabited by people only a few inches tall, young women Hakumei and Mikochi live together in a house built into a tree. Hakumei is an energetic and tomboyish carpenter, while Mikochi is a feminine and calm tailor. Despite their differences, they get along well and spend their days having fun living their lives in the woods.

The two of them spend their time working, going on sightseeing adventures, and taking shopping trips into Tsumiki Marketplace by the ocean. They make many friends along the way, be they sentient woodland creatures like Iwashi the Weasel or fellow miniature people such as the songstress Konju and the inventor Sen.

This is a relaxing look into the day-to-day lives of its titular characters as they explore and interact with their tiny world which seems to be straight out of a fairy tale.