In 1958 Japan, university professor Tatsuo Kusakabe and his two daughters, Satsuki and Mei, move into an old house to be closer to the hospital where their mother Yasuko is recovering from a long-term illness. One day, Mei sees two white, rabbit-like ears in the grass and follows the ears under the house. She discovers two small magical creatures who lead her through a briar patch and into the hollow of a large camphor tree. She meets and befriends a larger version of the same kind of spirit, which identifies itself by a series of roars that she interprets as "Totoro".
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