A man known as Ichi stands on a balcony, where he finds himself indulging in a disturbing act while witnessing a vile scene below: a pimp committing heinous violence against a prostitute. When his presence is discovered, Ichi hastily retreats. Meanwhile, a sadistic yakuza boss named Anjo faces his own demise. The aftermath sees a meticulous cleaning crew, headed by Jijii, eliminate any evidence of Anjo's death, falsely pinning the blame on Ichi.
In the wake of these events, Kakihara, Anjo's high-ranking enforcer with a penchant for sadomasochism, examines the immaculate apartment. He deduces that Anjo must have escaped with a prostitute and a stolen sum of three million yen. Kakihara heads to an underground nightclub where, upon confronting Anjo's girlfriend Karen, a Chinese prostitute fluent in English, he speculates that Anjo is likely alive and may have been taken by a rival clan. Jijii plants rumors suggesting that Suzuki, a member of the rival Funaki clan, is the one responsible for Anjo's abduction, leading Kakihara to capture and brutally torture Suzuki, only to find him innocent. In a twisted gesture, Kakihara nips off the end of his own tongue and presents it to Suzuki's superior as an apology.
As the plot unfolds, Kakihara and his crew capture Kano, a drug-addicted accomplice of Jijii's cleaning operation. Kano reveals that it was indeed Ichi who killed Anjo and that Kakihara is now the next target. Later, Ichi reappears on the pimp’s balcony to witness more atrocities involving a prostitute named Sailor, someone he frequents. Stepping in, Ichi kills the pimp, asserting his twisted claim over Sailor by stating he will now take the role of her aggressor. In a startling turn of events, when Sailor tries to stand her ground, Ichi reacts violently, resulting in her death.
Kakihara faces expulsion from the yakuza, initiated by Suzuki, yet remarkably, the entire Anjo clan chooses to defect alongside him. Suzuki, aiming to eliminate Kakihara, offers Jijii a substantial sum to carry out the task. However, it soon becomes evident that Jijii is the puppet master, manipulating both yakuza clans and using Ichi as an unwitting assassin. Ingeniously, Jijii plays on Ichi’s dormant fury by implanting fabricated memories that dive deep into his psyche, notably a traumatic high school incident.
Ichi bravely defends a bullied boy named Takeshi, whose father works under Kakihara. Jijii, keen to exploit Ichi's violent tendencies, leads him to an apartment filled with ex-Anjo clan members, where Ichi indiscriminately slaughters everyone present. Afterward, a grateful Takeshi thanks Ichi for his earlier intervention. Their encounter is soon interrupted when Kaneko, Kakihara's enforcer, rescues Ichi from another brothel owner, invoking memories of his own salvation at the hands of an Anjo clan member.
In a bid to track down a prostitute named Myu-Myu, Kakihara enlists the help of corrupt twin detectives, Jiro and Saburo. When traditional interrogation fails, Saburo resorts to finding Ryu Long, who remains elusive. Nevertheless, Kakihara captures Long but not without complications, as major power plays emerge within their circle. Meanwhile, Jijii uses Karen to charm Ichi by masquerading as the embodiment of his altered memories of trauma, ultimately leading to her tragic demise at Ichi's hands when confusion surges.
The tension escalates as Jijii communicates to Kakihara that Ichi is on a collision course with him. However, in a shocking turn, Kakihara's man Takayama catches Jijii, and a fierce confrontation ensues, ending with Takayama's demise at Jijii's hand. Ichi soon arrives at Kakihara's hideout, leading to a sequence of brutal killings, including the twins Jiro and Saburo.
The chaotic confrontation culminates on a rooftop, where the tangled relationships come to the fore. Under the influence of Jijii’s manipulation, Ichi mistakes Kaneko for his sibling, resulting in violence that leaves Kaneko wounded and Ichi spiraling into madness. Takeshi, witnessing this horror, confronts Ichi, who unravels in his own desperation. Disturbingly, Kakihara, faced with Ichi's unhinged rage, inflicts pain upon himself in an attempt to regain control. In the ensuing chaos, Ichi decapitates Takeshi, driving Kakihara into a hallucinatory breakdown as he believes the grotesque events to be reality.
As the dust settles, Kakihara’s perceived demise leaves questions about loyalty and sanity in a world riddled with manipulation. Years later, Jijii's life untangles, revealing a chilling end, as his body is found hanging from a tree, and an older Takeshi, now seemingly free from the past, departs from the park with a group of schoolchildren, hinting that the cycle of violence may continue in unforeseen ways.
