In the final months of World War II, 14-year-old Seita and his sister Setsuko are orphaned when their mother is killed during an air raid in Kobe, Japan. After a falling out with their aunt, they move into an abandoned bomb shelter. With no surviving relatives and their emergency rations depleted, Seita and Setsuko struggle to survive.

Two sisters move to the country with their father in order to be closer to their hospitalized mother, and discover the surrounding trees are inhabited by Totoros, magical spirits of the forest. When the youngest runs away from home, the older sister seeks help from the spirits to find her.