In the not so distant future, mankind has advanced to a state where complete body transplants from flesh to machine is possible. This allows for great increases in both physical and cybernetic prowess and blurring the lines between the two worlds. However, criminals can also make full use of such technology, leading to new and sometimes, very dangerous crimes. In response to such innovative new methods, the Japanese Government has established Section 9, an independently operating police unit which deals with such highly sensitive crimes. Led by Daisuke Aramaki and Motoko Kusanagi, Section 9 deals with such crimes over the entire social spectrum, usually with success. However, when faced with a new A level hacker nicknamed The Laughing Man, the team is thrown into a dangerous cat and mouse game, following the hacker's trail as it leaves its mark on Japan.

The red-light district, Yoshiwara, is suddenly taken over by Aizen Kou, an incense that has the ability to make anyone fall in love with the first person they see. Having been outlawed for its strong potency, the love drug was thought to have disappeared from the red-light district for good; however, it seems to have found its way back inside Yoshiwara's walls and now has the entire district under its influence. Of those affected is the cold-hearted Hyakka captain, Tsukuyo, and the first person she sees after inhaling the smoke is none other than the brazen Yorozuya leader, Gintoki Sakata. Unbeknownst to everyone else though, she was already attracted to Gintoki. With those hidden feelings now intensified, Tsukuyo must overcome her afflictions and work with the Yorozuya to return everyone back to normal.

Following the temporary retreat of the Altana Liberation Army from the Kabuki District, the state of the war has seemingly improved. However, as the Oniwaban, Shinsengumi, and residents of the district combat the army's remnants, Edo's greatest inventor Gengai Hiraga is abducted. Responsible for causing the enemy's withdrawal by rendering their weapons useless, Gengai's nanomachine virus is now at risk of being shut down. Meanwhile, a laser capable of obliterating a planet is activated in Earth's orbit on the Liberation Army's mother ship. Another battle ensues when Shinsuke Takasugi and the rest of the Kiheitai arrive on the vessel to stop the weapon from firing. Forced to fight a war on two fronts, the Yorozuya and their allies must prevail on both sides to save Edo and the rest of the world.

After the fierce battle on Rakuyou, the untold past and true goal of the immortal Naraku leader, Utsuro, are finally revealed. By corrupting the Altana reserves of several planets, Utsuro has successfully triggered the intervention of the Tendoshuu’s greatest enemy: the Altana Liberation Army. With Earth as the main battleground in this interplanetary war, Utsuro's master plan to destroy the planet—and himself—is nearly complete. An attack on the O-Edo Central Terminal marks the beginning of the final battle to take back the land of the samurai. With the Yorozuya nowhere in sight, the bakufu all but collapsed, and the Shogun missing, the people are left completely helpless as the Liberation Army begins pillaging Edo in the name of freeing them from the Tendoshuu's rule. Caught in the crossfire between two equally imposing forces, can Gintoki, Kagura, Shinpachi, and the former students of Shouyou Yoshida put aside their differences and unite their allies to protect what they hold dear?