Due to an unusual ability to see strange creatures called youkai, Takashi Natsume has never fit in. Over time, he has accepted that no one would ever believe him and has closed himself.

When Natsume accidentally breaks an intangible barrier, he frees Madara—a mighty spirit in the form of a lucky cat. Madara notices that Natsume bears a remarkable resemblance to his late grandmother Reiko Natsume, an outcast girl who created the Book of Friends. It is now in Natsume's possession.

With no interest in its powers, Natsume decides to keep the book for the sake of his grandmother's memories and to protect it from scheming youkai. Therefore, he makes a deal with Madara: he will hand him the book once his time is up, and in turn, Madara will act as Natsume's unofficial bodyguard. With his newfound goal of freeing those Reiko had sealed, Natsume's relationship with both youkai and humans slowly begins to improve.

Natsume Yuujinchou San follows Takashi Natsume, a boy who is able to see youkai. Natsume and his bodyguard Madara, nicknamed Nyanko-sensei, continue on their quest to release youkai from their contracts in the "Book of Friends."

Natsume comes to terms with his ability to see youkai and stops thinking of it as a curse. As he spends more time with his human and youkai friends, he realizes how much he values them both and decides he doesn't have to choose between the spirit and human worlds to be happy.