In feudal Japan, the half demon Inuyasha was sealed away by the priestess Kikyo. Many years later he is revived by Kagome, who has slipped through time from the present day. Kagome is surprised when the sacred Shikon Jewel, which makes demons stronger, emerges from a cut on her body.

Kagome finds out that she may be the reincarnation of Kaede's late older sister, the priestess Kikyo, who sealed Inuyasha with her arrow. The Carrion Crow demon is after the Shikon Jewel and kidnaps Kagome, but Inuyasha shows up to save her. After Kagome defeats the Carrion Crow with an arrow, the Shikon Jewel shatters into pieces.

Kagome has the ability to see pieces of the Shikon Jewel. Inuyasha has the power to defeat demons. Both of their powers are needed to gather the shards of the jewel that were scattered, but the two don't get along. The demon Yura, who is after the jewel, manipulates villagers to attack Inuyasha.

Kagome has returned to the present day and is relaxing in her home when Inuyasha comes looking for her. Some of Yura's demonic hair is on his body. Kagome and Inuyasha return to feudal Japan to exterminate the Yura of the hair.

Kagome learns that Inuyasha is a half demon, born of a human mother and a dog demon. Inuyasha's half brother Sesshomaru appears, looking for the tomb of their father. In order to manipulate Inuyasha, he brings Inuyasha's dead human mother with him. But the woman turns out to be a demon known as a muonna.

The muonna makes Inuyasha reveal the location of his father's grave. Sesshomaru removes Inuyasha's right eye (the black pearl) and opens the entrance to the grave. Kagome is angered by Sesshomaru's cruelty. She goes with Inuyasha after Sesshomaru. Inside their father's tomb is a memento of Inuyasha's father, the sword Tetsusaiga.

Kagome is able to pull out the Tetsusaiga. Sesshomaru tries to kill her, and Inuyasha is angered and fights to protect Kagome. His will to protect a human changes the Tetsusaiga into its true form, a fang sword.

In the Kai Province, there is a young samurai named Nobunaga. He is a clumsy but earnest young man. He has heard rumors about the man that the the princess, his childhood friend, has married. Nobunaga tries to save the lord of the castle who is possessed by a toad demon.

Shippo is a demon fox whose father was killed by the the Thunder Brothers: Hiten and Manten. He steals the Shikon Jewel shards from Kagome so that he can avenge his father.

Inuyasha goes to save Kagome from Manten. Hiten devours the sacred jewel shard that Manten had and absorbs his demon powers. Hiten attacks Inuyasha with his Raigekijin. Inuyasha is in trouble and defends himself with the scabbard of the Tetsusaiga.