Satsuki and Mei are sisters who’ve recently moved with their father to an old house in the country. Their mother is recovering in hospital from a chronic illness. The girls explore the house and the surrounding forest and discover a number of strange phenomenon, including soot sprites and little animal-like creatures that spread acorns and nurture the flora. The biggest mystical resident of the forest is the enormous Totoro - so named for the sound of his roar - that Satsuki and Mei both encounter at different times and places. An elderly lady of the village suggests that the sprites are only visible to them because they are children.

The girls work hard to prepare the house for a much anticipated visit from their mother. They gather vegetables from a nearby farm to prepare a meal for her. At the last minute, however, Satsuki receives a cryptic telegram from the hospital, and phones her father at his university. Her father learns from the hospital that her mother’s visit is being delayed because of her health. Mei takes the news hard, and sets off on foot to visit her mother in hospital herself. She gets lost, and the farmers can’t find her.

Satsuki goes to where Mei first met Totoro, and pleads with him to help her find Mei. Totoro summons the cat bus, which takes Satsuki directly to Mei, and then takes both of them to the hospital, where they are satisfied that their mother is doing well, and that their father is taking care of her. The cat bus returns them both to their house and then disappears. Totoro and the sprites maintain a close watch over the house as the girls go about their daily lives.