Cut to Tokyo 1997, Kagome's grandfather is trying to tell her about the legend of the Shikon Jewel, but she admits that she never listens to his tales. On the day of the 15th birthday, Kagome goes into the well's house in order to find their cat. Suddenly from the well, a creature grabs Kagome from behind, pulling her into the well. Kagome pushes the centripede away, detaching two of its arms from the impact. Kagome climbs out of the well, to find herself in a strange environment.
As she tries to find her way home, she comes across the tree on which Inu-Yasha is trapped. Suddenly, she is attacked and tied up. She realises she is back in the warring ages. The village priestess, Kaede, now old and frail, tells Kagome that she is splitting image of Kikyo. Suddenly, the whole village is attacked by the centripede. Kagome, realising that its real target is her, runs into the forest in order to lure it into the well. In the forest however, Inu-Yasha suddenly wakes.
Inu-Yasha asks Kagome to remove the arrow holding him, unless she wishes to die there with him. As Kagome touches the arrow, it vanishes, and Inu-Yasha is free. With a slash of his claws, the centripede is cut into pieces, and Kagome retrieves the jewel. Just as she thought the danger is over, Inu-Yasha threatens to kill her, unless she hands him the jewel.
Back in the village, Kaede tells Kagome that Inu-Yasha is only a half-demon, who wants to use the Shikon jewel to become a full demon. She also says that Kagome is the reincarnation of Kikyo, so Kagome is the new protector of the jewel.
That night, Inu-Yasha fends off a crow demon, the first of the demons to come for the jewel as Kagome dreams of returning to her family. The next day, she heads back to the well, knowing that it has to be the way back, except a pair of hands grabs her before she reaches it. She is taken to a samurai leader, who snatches the jewel from her. In the village, everyone including Inu-Yasha is frantic, trying to find Kagome.
Inu-Yasha tells Kagome to shoot the crow, saying that Kikyo was a master with the bow, except Kagome misses and the transformation has already begun.
Inu-Yasha tries to find the piece of the crow with the jewel, when its head attacks him. He smashes it but Kagome finds that the jewel has been shattered into small pieces. Back in the village, Kaede warns them that a demon possessing even a small sliver of the jewel can be as problematic, and orders them to work together to recover the whole jewel.
In the village Kaede is examining a sick girl, who suddenly rises and attacks Kaede with a knife. Kagome reaches the well, only to find the remains of the centripede in it. She steps back, onto to find her face and clothes cut by strands of hair. She looks up to see another girl, Yura of the Hair, who takes the Shikon shard, and attacks Kagome. She falls backwards into the well, and when Yura looks into it, she is no longer there.
Inu-Yasha making his way back to the village, finds himself attacked by the villagers, as well as Kaede lying in a puddle of blood. She tells him that the villagers are manipulated by someone, and that they need Kagome to help them.
Kagome wakes up at the bottom of the well, and hears the voice of her grandpa and Sota. To her relief, she is home, and she sighs happily as she takes a hot bath. Her grandfather, afraid that anything would come after Kagome, goes and seals the well, assuring her that it will remain shut forever. Meanwhile, Inu-Yasha tracks Kagome to the well, and jumps in to find her.
Kagome suddenly notices there is a strand of hair on Inu-Yasha's sleeve, and that it is moving. She runs back to the well, only to find more strands of hair coming out from the well. She directs Inu-Yasha to destroy the hair, only to have more growing back. She then sees one strand of hair which is manipulating the others, and Inu-Yasha finally cuts it, and all the hair disappears. Kagome, intrigues as to why Yura is still after them after stealing the shard, heads towards the well. Inu-Yasha gives her his coat, which he tells her is stronger than any armour, because she would need it with skin as weak and frail as hers. Then together, they jump into the well, where Yura is waiting for them.