Nine year old Ren has recently lost his mother. With no news of his father and refusing to live with his legal guardians, Ren flees into the streets of Shibuya. Ren steals some food and sleeps in an alley, reminiscing the aftermath of his mother’s funeral.
In the Beast Kingdom, the grandmaster has decided he will retire in order to reincarnate as a deity and names two potential successors: the popular Iōzen, who is also the father of two children, and the powerful Kumatetsu, who is lonely and lazy. The Grandmaster suggests that Kumatetsu find a disciple in hopes of inspiring him to succeed him.
While wandering the streets of Tokyo with his makeshift companion, Tatara, Kumatetsu meets Ren and suggests that the boy becomes his disciple. Though Ren is fiercely opposed, he follows Kumatetsu back to the Beast Kingdom out of curiosity but is unable to go back to the human world. As he watches a battle between Iōzen and Kumatetsu, Ren is impressed with Kumatetsu’s persistence despite the lack of support from onlookers. When Ren cheers for him, Kumatetsu is easily defeated. However, the Grandmaster declares the actual duel of succession has not come yet.
Taking Ren as a disciple, Kumatetsu gives him a new name, Kyūta. Their initial training sessions go poorly, but Kyūta realizes that he can learn from Kumatetsu by imitating him while performing his household chores. The boy gradually discovers that he can predict his master’s movements, and can dodge and move adeptly in combat. They soon begin training together. After eight years, the teenage Kyūta has become a distinguished kendo practitioner. Moreover, through his relationship with Kyūta, Kumatetsu gains his own following of supporters, including the younger son of Iōzen, Jirōmaru, who wishes to be trained by Kumatetsu.
Kyūta finds a way back to the human world, and befriends Kaede, a young student. In the process, Kyūta finds his father, who had been searching for Ren since he disappeared and wants to catch up. Torn by his double life, he is unable to reconcile the resentment he had as Ren and the lack of connections he has as Kyūta. When he rejects both his father and Kumatetsu, he discovers a powerful void within himself that nearly overwhelms him, until Kaede gets him to calm down and gives him a bracelet that has helped her when she becomes anxious.
On the day of the succession duel, Kumatetsu loses confidence without Kyūta’s encouragement and is nearly subdued by Iōzen. However, Kyūta has been secretly watching and reveals himself, helping Kumatetsu defeat Iōzen. When Kumatetsu is declared the winner and the new lord, Iōzen’s elder son Ichirōhiko is revealed to be a human who had been found on the streets of Tokyo as an infant and adopted by Iōzen. Having developed a vacuum in his heart like Kyūta, unwilling to believe that he is a human and not a beast, Ichirōhiko manifests telekinetic powers and seriously injures Kumatetsu with Iōzen’s sword. Kyūta is nearly overtaken by his own emptiness and tries to kill Ichirōhiko, but regains his senses with Kaede’s bracelet as Ichirōhiko is consumed by darkness and disappears.
Kyūta decides to leave for the human world to fight Ichirōhiko. When Kaede refuses to leave him, they are attacked by Ichirōhiko, who takes the form of a destructive whale. Unable to hold his own against Ichirōhiko, the young man decides to use the vacuum within himself to absorb his opponent’s negative energy and then kill himself, saving everyone else. However, Kumatetsu uses his new privilege as the lord and reincarnates as a deity, taking the form of a sword “to be handled with the heart” in reference to their first training session together. He merges with his pupil’s form, filling his empty void within him. Together, the two manage to defeat Ichirōhiko without killing him. Ichirōhiko wakes up surrounded by his adoptive family. Meanwhile; back in Shibuya, Ren is talking to Kumatetsu (who now resides inside him) and the two have a heartfelt moment together, with Kumatetsu promising to always be there for Ren and threatening to beat him up from the inside if he wavers again.
In the aftermath, Ren celebrates his victory with Kaede in the Beast Kingdom and returns to the human world. After reconciling with his father and himself, Ren decides to live once again in the human world with Kumatetsu forever residing in his heart.