Takashi Natsume and his spirit companion Madara, known as "Nyanko," keep retrieving the names of spirits from the Book of Friends that his late grandmother Reiko Natsume left behind.
While returning home from school one afternoon, Takashi meets a hidden spirit called Monmonbou, who remembers his grandmother when it hears Takashi"s name. His innate curiosity drives him to investigate the enigmatic town where his grandmother once lived, and he befriends Yorie Tsumura—an old associate of hers—and her son Mukuo, uncovering further details of her history.
Meanwhile Nyanko takes a detour to find food and discovers an odd "Spirit Seed." The seed magically grows into a fruit tree within a single night. Tempted, Nyanko eats the fruit and splits into three copies. Takashi and his companions try to resolve Nyanko"s dilemma, along the way revealing additional hidden truths about the town.