The story begins in Feudal Japan, when InuYasha, a half-demon (han'yō), steals the Jewel of Four Souls from a village. The Jewel of Four Souls is an item that can increase one's powers enormously. InuYasha does not get far before Kikyo, the young miko of the village, shoots him with a sacred arrow that indefinitely seals him onto Goshinboku, a sacred tree in the nearby forest. After being mortally wounded, Kikyo tells her younger sister, Kaede, to burn the jewel with her body to prevent it from falling into the hands of evil.
In modern Tokyo, a junior high school girl named Kagome Higurashi is on her way to school. She stops in the well house of her family's Shinto shrine to retrieve her cat, Buyo, when a centipede demon emerges from the well and pulls her into the Sengoku period of Japan.
Not knowing where she is, Kagome wanders around a forest near the well. She spots Goshinboku off in the distance and proceeds towards it. On the tree, she finds InuYasha, who is still sealed in an enchanted sleep. Villagers seize her and take her to the old priestess, Kaede.
