During their quest in the feudal era to recover the shards of the miraculous Shikon Jewel, Inuyasha, Kagome Higurashi, and their friends become the target of Menoumaru Hyouga—a demon awakened by one of the Shikon fragments, now in pursuit of Inuyasha's heirloom sword Tessaiga. Following a clash between the fathers of Inuyasha and Menoumaru, the weapon is the only means to restore Menoumaru his rightful family heritage. However, upon ambushing Inuyasha, Menoumaru discovers that Tessaiga's owner alone can wield it. Determined to achieve his objective regardless, he kidnaps Kagome to force Inuyasha to use his blade and release the sealed powers of the Hyouga clan. With their dependable companions' assistance, Inuyasha and Kagome oppose Menoumaru, unaware that his sinister intentions and alarming potential will endanger not only their world but also its distant future.

Fortune smiles on Inuyasha and his allies when they finally defeat their nemesis Naraku, who has caused them unrelenting hardships. Overjoyed by the long-awaited victory, they all hurry to resume their former lives, unaware that danger still lurks around. Kanna and Kagura, two of Naraku's subordinates, make arrangements to set free a sealed demonic entity that claims to be Kaguya, the legendary Princess of the Heavens. Although preoccupied with their own endeavors, Inuyasha's group members reunite by a string of unusual coincidences involving Kanna and Kagura along with an inexplicable phenomenon of repeated full-moon nights. Upon realizing that Kaguya is behind the troubling events and that she holds a terrible power, they join forces once more to stop the disastrous fate she has planned for the world.

Following Inu no Taishou's death, his swords Tenseiga and Tessaiga were passed on to his sons, Sesshoumaru and Inuyasha respectively. However, there exists one more blade. During a visit to his friend Kagome Higurashi in modern times, Inuyasha encounters Sounga—his father's third sword. Found by one of Kagome's ancestors inside the old well that connects the past to the future, Sounga has been kept for years as a treasured artifact at the Higurashi shrine. Nevertheless, it soon reveals itself to harbor an evil spirit with a terrible urge to kill. While struggling to subdue its calamitous nature, Inuyasha manages to bring Sounga back to the feudal era where he must confront his brother Sesshoumaru, who has always desired to possess it. But when they lose track of the sword during their fight, the siblings engage in a fervent competition to find it, still unaware of its secret and the legacy that Inu no Taishou has left for them.

Hourai is a mysterious island that appears for a limited period once every 50 years. Some say that the isle holds the secret of eternal youth; others believe that it brings disaster to their land. When Inuyasha's group saves a half-demon child from being hunted by a monstrous creature, they learn that her name is Ai and that she fled from Hourai. Surprisingly, the girl is an acquaintance of Inuyasha and begs him to rescue her friends, who are being held prisoner by vicious demons calling themselves the Four War Gods—an enemy Inuyasha remembers well. Upon reaching Hourai, Ai's guests are horrified to discover that only a handful of orphans still inhabit the island and are destined to become sacrifices to increase the Four War Gods' powers. Furthermore, the victims bear their oppressors' enchanted mark, which prevents them from escaping. Defeating the four demons remains Inuyasha's most viable option, but their superiority in strength will require daring initiatives achievable only by the group's combined teamwork.