During the Pacific War in Tokyo, Mahito Maki loses his mother, Hisako, in a hospital fire. His father, Shoichi, an air munitions factory owner, marries his late wife’s sister, Natsuko, and they evacuate to her rural estate. Mahito, feeling distant from the pregnant Natsuko, is led by a peculiar grey heron to a sealed tower, the last known location of Natsuko’s architect granduncle.

Following a school fight and self-injury, Mahito is lured by the heron with promises of finding his mother. Natsuko saves him from creatures with a whistling arrow, inspiring Mahito to craft his own magically imbued arrow. When Natsuko goes missing, Mahito, with an elderly maid Kiriko, enters the tower and is deceived by an imitation of his mother made by the heron. After piercing the heron’s beak, revealing the Birdman inside, a wizard appears and orders the Birdman to guide them as they sink into the floor.

Mahito descends into an oceanic world, where he is rescued from attacking pelicans by a younger Kiriko. They sell a giant fish to bubble-like spirits called Warawara, who are protected by a pyrokinetic young woman named Himi. After reconciling with the Birdman, Mahito is separated and later saved by Himi, who shows him a door back to Natsuko’s estate. Mahito sees his father but returns to continue his search for Natsuko.

Infiltrating the parakeets’ kingdom, Mahito finds Natsuko but is rebuffed. Himi saves them from an attack, and in a dream, Mahito meets the wizard, Natsuko’s granduncle. The wizard, managing a dimension with stone blocks, asks Mahito to take over. Mahito notices the blocks’ malice and, waking up, climbs the tower with the Birdman to stop the Parakeet King, who wants to maintain the world using replacement blocks.

As the Parakeet King’s attempt fails, the world collapses and floods. Mahito, Himi, and the Birdman escape, reuniting with Natsuko and young Kiriko. Himi, revealed to be Mahito’s birth mother, returns to her time. Mahito returns with Natsuko, amidst animals reverting to non-anthropomorphic forms. The Birdman advises Mahito to forget his experiences as they head back home.

Two years later, Mahito moves back to Tokyo with Shoichi, Natsuko, and his new sibling, carrying with him the experiences and a stone of power from his journey.