A young boy, Tadashi Ino, finds himself in a new town following his parents' divorce. During a local festival, he is unexpectedly honored as this year's Kirin Rider, a title derived from the legendary Chinese chimera, the Qilin, known for being a guardian of goodness. However, this title proves to be more than ceremonial when a malevolent spirit, Yasunori Katō, emerges. Katō, a demon fueled by rage over the devastation of Japan’s indigenous tribes, seeks retribution against modern Japanese society for their mistreatment of the yōkai.
To execute his revenge, Katō aligns himself with a yōkai named Agi, summoning a fiery entity called Yomotsumono, which embodies the bitterness of all that humanity has discarded. Katō enflames his vendetta by feeding yōkai into Yomotsumono’s flames, amalgamating their essence with discarded relics to create formidable creatures known as kikai. These kikai, under Katō's control, ruthlessly capture other yōkai to bolster their ranks while preying upon humans.
Amidst this turmoil, a sunekosuri escapes from Katō's grasp and befriends Tadashi, who embarks on a quest to obtain the Daitenguken, a sword vital for a Kirin Rider, as part of his initiation. Terrified by the legends surrounding the mountain where the sword is said to dwell, Tadashi hesitates and nearly turns back. However, driven by fate and with the clever intervention of the sea spirit Shōjō, he faces a challenge that ultimately proves his valor. Accompanied by Shōjō, Kawahime, and Kawatarō, he reaches the Daitengu, who bestows the sword upon him, only for it to shatter as Agi captures his sunekosuri companion, leaving Tadashi unconscious.
Upon regaining consciousness, Tadashi finds himself among the yōkai, engaging in discussions to fix his broken sword. They conclude that they must seek help from the blacksmith Ippondatara, discovering that he too is imprisoned. Led by General Nurarihyon, their group departs to rescue the blacksmith. Meanwhile, Kawataro attempts to restrain an ittan-momen, mistakenly misinterpreting the bumbling Azukiarai's antics as bravery, not realizing he is merely incapacitated.
When Katō's airship-like fortress launches towards Tokyo, Tadashi and his newfound companions pursue it. They arrive just in time as the fortress engulfs the Shinjuku Capital Building of Tokyo, and they find Ippondatara, who skillfully reforges the sword. Ashamed of his own capture, Ippondatara refuses to disclose his escape, revealing that the sunekosuri had taken his place as a kikai. Clad in new gear, Tadashi and his allies march into battle, confronting overwhelming foes until they receive unexpected support from an army of yōkai, lured by the notion of a festive celebration. This chaotic brawl allows Tadashi and Kawahime to infiltrate the fortress, joined by a reporter named Sata, whom Kawahime had previously rescued.
In a heartbreaking moment, Tadashi must confront the kikai that his sunekosuri friend has become, battling fiercely to return it to its true form, albeit gravely wounded. Gripped by anger, he faces Agi, who is abruptly summoned by Katō to complete a dreadful ritual involving Yomotsumono. Despite his frantic efforts, Tadashi struggles against Katō’s formidable power. Kawahime, conflicted yet resolute, reveals her disdain for humans, stemming from her abandonment, but clarifies she harbors no need for vengeance—an emotion she considers distinctly human. Unmoved, Katō dispenses with them as Azukiarai arrives in a clumsy fashion.
In a final showdown, Katō calls upon Agi once more, but her love proves detrimental to his plans. In a chilling moment, he slays her and enters an oven to merge with Yomotsumono. Yet, thanks to Sata's intervention, an adzuki bean from Azukiarai inadvertently triggers a cascade of positive feelings that obliterates Yomotsumono.
As the yōkai disperse, Tadashi and Sata find themselves back on the street, where the boy fabricates his first white lie about Kawahime’s affections for him. Fast forward years later, and we see Tadashi as a man who can no longer perceive yōkai, including his dear sunekosuri friend. The film concludes hauntingly, revealing the sunekosuri facing a now Azuki-pupiled Katō.
