In rural postwar Japan, two young sisters, Satsuki and her energetic younger sibling Mei, relocate to the countryside with their father to be closer to the hospital where their mother is recuperating from a long-term illness. Their new life is filled with the wonder of nature and the excitement of exploring their enchanting surroundings. The girls discover that the nearby forest is inhabited by magical creatures and spirits of Japanese folklore, unseen by most humans.

The eldest sister, Satsuki, attempts to balance her responsibilities at home and school while caring for Mei. One day, Mei stumbles upon a large, gentle, and extraordinary creature in the forest, which she names Totoro. This mystical forest guardian, unforgettable with his large eyes and soft fur, introduces the sisters to a series of whimsical adventures, creating a bond between them. As the girls navigate the trials of childhood and await their mother's recovery, they find solace and joy in their interaction with Totoro and the magical world he represents.