Ghost Stories tells the tale of Satsuki Miyanoshita, who moves with her family to the hometown of her deceased mother. On her first day of school, Satsuki; her brother Keiichirou, a first-grader; their neighbor Hajime Aoyama; Momoko Koigakubo, an older schoolmate; and Leo Kakinoki, a classmate and friend of Hajime’s with a penchant for the paranormal visit the abandoned school building adjacent the current school complex and discover that the building is haunted.
It is soon after revealed that Satsuki’s mother was responsible for sealing several ghosts who haunted not only the school but also the town, and now they are released due to the urbanization taking place in the surrounding area. Satsuki’s mother left behind a book detailing how to exorcize the ghosts once and for all. In her first confront, Satsuki faces a demon called Amanojaku, but in the process Amanojaku is sealed within Satsuki’s pet cat, Kaya. Although Amanojaku does not want to help Satsuki at first, the danger soon threatens to envelop the town and it is left up to Satsuki, her friends and Amanojaku to stop the ghosts.