On the first day of Obon in feudal Japan, Shinzaburou, Kōjirō Hongō, a member of a well-off samurai family, spends his days teaching poor children who live in the village row houses. His father presses him to marry his brother’s wife after the brother died in an accident shortly after their wedding, but Shinzaburou is hesitant, torn between duty and compassion for the children around him.
Later, Shinzaburou leads the village kids as they participate in a lantern float along a nearby river. He frees two lanterns that get stuck by a branch, and two women express their gratitude. The women reveal themselves as from the Yoshiwara, granted permission to leave during Obon. The younger woman, Otsuyu, Miyoko Akaza, is set to marry an elderly man, and her mistress, Oyone, Michiko Ôtsuka, asks Shinzaburou to marry Otsuyu for the remainder of Obon. Shinza’s neighbor, Banzo, notices the women leaving Shinza’s home, recognizing Otsuyu, which sets off another thread of tension in the village.
Banzo, Kō Nishimura, tells a friend about what he saw, but his friend insists that the women could not both be alive because they are dead; they must be ghosts who can appear because this is their first Obon. Oyone asks Shinza to stay with Otsuyu for the rest of the festival, and he agrees to the arrangement. The two women are perceived by Banzo asphasmic presences, and Oyone’s ghost later unsettles him as he witnesses strange happenings from his nearby home. The high priest is consulted and advises locking Shinza away for the duration of Obon and placing prayer scrolls over the doors to keep the spirits out. Shinza agrees to be secluded, hoping to shield the village and the schoolchildren.
As night falls, the ghosts come but the prayer scrolls seem to hold them at bay. They try to lure Shinza to open the doors, promising another world, but he remains steadfast, insisting he must live for the sake of the children. Banzo’s wife returns home, unaware of the supernatural danger, and Oyone urges Banzo to tear down the scrolls so the ghosts can enter. She even directs him to seek money from a grave north of town, offering it in exchange for removing the barrier.
At the temple graveyard, Banzo digs up a stash of 100 ryo. Otsuyu and Oyone physically pull Banzo and his wife toward Shinza’s house to pull the barrier down. Otsuyu enters, telling Shinza they are taking him to the other world, and they embrace as the room seems to blur between life and the supernatural.
The next day, the villagers discover Shinza dead beside the skeletal remains of Otsuyu and Oyone. Banzo and his wife flee town but stop at the graveyard to search for more money. A group of men confronts them, accusing the couple of stealing the buried funds, and they are killed in revenge. The village then holds a funeral for Shinza, marking the end of a turbulent, haunted chapter that blurred the lines between duty, desire, and the restless echoes of Obon.
