The story opens with 11-year-old Satsuki and 4-year-old Mei Kusakabe riding in a truck making its way down a country road in rural 1950's Tokyo. Along with their father, a professor of anthropology at a Tokyo university, the girls are on their way to their new home in the country. Their mother is recovering from an illness, and they have bought a house to provide her a more healthy environment to recover in. A massive camphor tree towers in the sky as they approach the gateway to their home.
Once they arrive, the girls immediately scamper up the trail dug under the camphor tree on their way to the house. They run around the house exploring, excited at all the room available in both the house and it’s acreage after the crowded apartment blocks of Tokyo.
Satsuki comes across an acorn lying on the floor. She quickly finds another and wonders if squirrels are living in the house and leaving them behind. Mei quickly joins in the search for acorns. Their father tells them they need to open the storm shutters to start airing out the house, and the girls run off to do so. They open the back door onto the bathing area, and a cloud of black cinderpuffs scatter into the cracks and crevices. Startled, they report what they saw to their father, who hypothesizes that they must be ma-kuro kurosuke (essentially, a play on the Japanese words for pitch-black and Mr. Black) and explains that when you enter a dark place from bright sunlight, black spots appear before your eyes. Agreeing that what they saw must have been the ma-kuro kurosuke, they start yelling for them to appear, to no avail. Their father tells them to open the upstairs windows, so off they go. Once they open the door, again they see a quick flash as the ma-kuro kurosuke escape from the light. Satsuki leans out of the window to tell her father the house is haunted, and he replies he has always wanted to live in one. As Satsuki runs back downstairs, Mei approaches a crack in the wall where the ma-kuro kurosuke escaped and sticks her finger in. She is immediately enveloped in an explosion of the creatures as they all climb the wall and escape into the attic, except for one fellow that Mei "captures" and runs downstairs to show to Satsuki and her father.
She runs into an old woman, who is introduced by their father as a neighbor who had watched the house until they arrived. Mei excitedly opens her hands to show them her captive, and is surprised to find her hands covered only in soot. Satsuki notices that both her and Mei have tracked soot down from the upper floor, and the neighbor-lady comments that they found the susu-atari (fluffy soot balls). The girls ask if they are like ghosts, and the neighbor-lady replies that they are harmless and only occupy vacant houses. Now that there will be people living there, they are probably deciding to leave in the night.
Next, the girls go get water and help clean the house. Kanta, the boy they had seen earlier on the road on the way to the house, arrives with a basket of food for them. Not expecting to see Satsuki, he stiffly hands her the basket and makes his escape, stopping long enough to tell her that her new house is haunted. They all have lunch and granny eventually heads home and Satsuki heads out to collect firewood for the bath. A large gust of wind suddenly springs up and washes over her, disappearing as fast as it had arrived. Later, in the bath as the storm rages outside, the girls are frightened by the creaking and moaning of the old house. Their father suddenly starts laughing, explaining that laughter makes fear runaway, and the girls join in.And in the attic, the ma-kuro kurosuke fly off into the camphor tree...
That morning, the family hops on their bike and rides to visit their mother in the hospital. Satsuki tells her mother that their new house is haunted, and she replies much like her father, adding she wants to meet the ghost. With both their parents unconcerned, the girls feel better about the situation. Satsuki and Mei visit with their mother while their father speaks with the doctor. On the w
ay home, Satsuki remarks that mother is looking better and their father explains that she should be able to come home soon.The next morning, Satsuki makes lunch for everyone and then the Kusakabe’s sit down for breakfast. Shortly thereafter, one of Satsuki’s schoolmates calls for her and she dashes off. Mr. Kusakabe starts to work while Mei goes out exploring. She eventually comes across another acorn like they found in the house.Suddenly, she sees a small translucent white creature (a Chibi Totoro) walking along. She falls in behind it and the creature turns back, notices her, and darts off under the house. Mei immediately starts looking for it, but the creature appears on the other side, now with a larger blue version (a Chu Totoro) carrying a bag. The bag has a small rip, through which acorns are falling out. Mei gives chase to the both of them, and they scurry off into a tunnel under the camphor tree. Undeterred, she heads in after them, losing her hat in the process. She scrambles along the path, eventually falling out into a large forested cavern where a massive Totoro is sleeping in its den...
Satsuki returns home from school and, not finding Mei, starts searching for her with her father. They find her hat and, deeper in the underbrush, Mei herself, sleeping. They wake her up, and Mei asks where the Totoro is. She goes running back down the tunnel, only to re-em
erge a moment later a few feet from where she entered, the pathway she had taken earlier now gone... Depressed, she reiterates that she really did meet the Totoro. Her father remarks that she must have met the Guardian of the Forest. On the way back to the house, Satsuki remarks how big the camphor tree is and their father remarks that his father had seen the tree and house when he was young and fell in love with it, which is why he chose to bring his family here. They stop and give formal thanks to the tree for taking care of Mei.That night, Satsuki writes to her mother about Mei’s meeting with the Totoro and how she hopes that the Totoro will visit her, as well.Outside, on a branch of the camphor tree, the three totoros play a tune...
At school the next day, Satsuki is called outside by granny, who has Mei with her. Their father is at the university for the day and Mei was supposed to stay with granny, but she insisted on being with Satsuki. Sighing, Satsuki says she will ask the teacher if Mei can stay with her in class.On their way home, a rainsquall breaks out and they seek shelter in a roadside shrine to Jizo-san, the patron saint of travelers. Kanta walks past with an umbrella, but seeing Satsuki, he turns around and tells her to take it. Confused, Satsuki is not sure what to do, so Kanta leaves it on the ground and runs off into the storm.Back at his house, Kanta is building an airplane and is cuffed by his mother for forgetting his umbrella. Satsuki and Mei appear to return Kanta’s umbrella and thank granny for watching Mei.
The girls are waiting at the stop for their father’s bus to arrive. Bored, Mei begins to explore and comes across another shrine, this one to Inari-san, the Fox God. She retreats back to Satsuki, and soon starts nodding off. Satsuki puts her on her back and soon notices the arrival of another passenger at the stop...Surprised to see the Totoro, who is wearing a large leaf on his head, she offers him her father’s umbrella so he will not get (any more) wet. The Totoro takes it and is soon enchanted
by the sound of the rain striking it. The sound wakes Mei, just in time to see the lights of an oncoming bus... The Totoro hands the girls a package and boards his bus.Totoro’s bus departs just before the girl’s father’s bus arrives. He explains that his train was late so he missed the first bus, but they excitedly explain to him what they just witnessed. They open the package once they are home, and are excited to see that it is full of acorns.Satsuki again writes another letter to her mother chronicling the events that happened and how they planted the seeds in a garden hoping that a new forest of acorn trees will grow there.
Later that night, the girls awake and look out to see the three Totoros doing a dance around the garden patch. As they do, the seedlings start to sprout. The girls run out to join them, and all five start to dance as the acorn forest starts to grow at an amazing rate into a massive tree. The largest Totoro throws down a spinning top, and they all hop aboard for a ride across the countryside.The next morning, Satsuki and Mei rush out to the garden to find the great tree gone. However, little acorn tree sprouts have appeared, and they are unsure of they dreamed the previous night’s encounter or not.
A mailman appears at the Kusakabe residence with a telegram.At granny’s, the girls are helping out in the garden patch. Satsuki informs granny that the hospital is letting mother come home for the weekend to begin to get acclimated.Kanta rushes up with the telegram, which he accepted since no one was home at the Kusakabe’s. Satsuki reads it and it says to call the hospital. Granny informs Satsuki to use the phone at Kanta’s uncles house to call her father. She does, and her father contacts the hospital. When he calls Satsuki back, he informs her that their mother is not feeling as well as they thought and they are going to cancel her homestay so they can monitor her condition. Mei is upset that their mother will not be coming home, and Satsuki grows upset at Mei and the two go their separate ways.Back at the house, Satsuki is worried about her mother and granny says that everything will be all right. Mei, seeing this, decides to take a fresh ear of corn to her mother and heads out on the road to the hospital.
Later on, Satsuki realizes that Mei is missing and starts to search for her. Correctly thinking she may have gone to the hospital, Satsuki starts down the main road, but people she meets inform her that they have not seen Mei. Kanta appears on his bicycle to inform her that they found a sandal by the pond and are searching around that area. They head back to the pond and Satsuki confirms that the sandal does not belong to Mei. Thankful for at least that small blessing, the townsfolk split up and start a general-area search.
Satsuki heads for the tunnel to Totoro’s lair and beseeches him to help her find Mei. Totoro takes her to the top of the camphor tree and calls out for the neko-bus, which bounds across the countryside and jumps to the top of the tree. Astonished, Satsuki realizes that no one else can see the cat-bus. Totoro motions for Satsuki to board, as the neko-bus’ sign changes to "MEI". She does, and the neko-bus bounds across powerlines in search of Mei
. They find her beside a line of Jizo-san statues and Satsuki and Mei are reunited. The neko-bus’ sign changes to Shichikokuyama Hospital and Satsuki asks if that means the bus will take them to the hospital. The neko-bus smiles, and off they go...At the hospital, Mr. and Mrs. Kusakabe are talking. She explains to her husband that she just has a light cold and that the hospital probably unnecessarily worried the children with the telegram.In the trees, the girls and the cat-bus look in on them.Back in the hospital, Mr. Kusakabe rises and goes to the window. When asked by his wife, he replies he thought he saw Satsuki and Mei laughing in the trees. He sees an ear of corn on the windowsill and hands it to his wife.Engraved on the husk are the words "To Mother"...