After the war, the economy grows at an accelerated pace, and urbanization forces the long-standing Ghost tribe and spirit-monsters to move deeper into the backwoods. Kitaro, the last of the Ghost tribe, was born in a graveyard. He is missing his left eye, but his hair usually covers the empty socket. He fights for peace between humans and youkai, which generally involves protecting the former. His eerie appearance has made him known as Hakaba (Graveyard) Kitaro. Together with his father, he observes insatiable human greed from between the Spirit World and the human world.
An inpatient becomes a ghost at a hospital; Mizuki, who is an office worker, is commissioned to find out the cause of the incident.
The grave of Yasha who has been in a long sleep is uncovered; at the same time, Vampire Dracula arrives in Japan; Yasha and Dracula get to scramble for one prey; the prey turns out to be the president of a company.
Mizuki comes back from hell; Trump Shigei happens to meet Mizuki and learns about the existence of the spooky boy, Kitaro; Rat Man plants a seed of the vampire tree in Shigei's body.
Kitaro has feelings for Neko; a suspicious shadow creeps up on Kitaro, as someone tries to trap him; Kitaro is committed to realizing Neko's dream of being a singer.