The game is set in a Nippon (Japan) based on Japanese folklore, and begins with a flashback to events 100 years prior to the game's present; the narrator describes how Shiranui, a pure white wolf, and Nagi, a swordsman, together fought the eight-headed demon Orochi to save Kamiki Village and the maiden Nami, Nagi's beloved. Shiranui and Nagi are unable to defeat Orochi, but manage to seal the demon away. In the game's present, Susano, a descendant of Nagi and self-proclaimed greatest warrior, breaks Orochi's seal due to the fact that he does not believe in the legend and wants to prove it false; Orochi escapes and curses the lands, sapping the life from every living being. Sakuya, the wood sprite and guardian of Kamiki Village, calls forth Amaterasu, the sun goddess, known to the villagers as the reincarnation of the white wolf Shiranui, and pleads for her to remove the curse that covers the land. Accompanied by the artist Issun (an inch-high creature known as a Poncle), Amaterasu is able to restore the land to its former beauty.