Rika is a volunteer social worker charged with caring for Tokunaga Sachie, a catatonic elderly lady. She discovers the quiet suburban home in a state of disarray and her ward malnourished and soiled, with no one else home. While vacuuming she finds a family picture with the wife's face cut out. Upstairs she hears shuffling noises coming from the bedroom closet, which has been taped shut. Rika removes the tape and opens the door when she hears meowing sounds. Inside the closet she discovers a black cat and a young boy whom she recognizes from the photo. She calls the welfare center to report the incident. She hangs up and is startled to see the boy staring down at her from the upstairs balcony. She asks for his name. "Toshio" is his reply. Murmuring from Sachie's room draws Rika's attention. Rika attempts to calm Sachie and helps her lie down. Sachie's eyes suddenly widen with fear as she sees something on the ceiling. A dark figure making a death rattle slowly descends upon Sachie and frightens Rika. A pair of eyes appear within the figure, which open and stare directly at Rika, who then faints. Toshio is last seen standing next to her.
Kazumi, Katsuya's wife and Sachie's daughter-in-law, cannot sleep at night because of what she presumes to be her mother-in-law's restless stirring. Kazumi reminds her husband as he leaves for work that his sister, Hitomi, is expected for dinner. She falls asleep on the couch and is startled awake. At first she assumes that it was Sachie, but soon sees a pair of fresh handprints on the door. She discovers a black cat on the stairs. When she approaches, a pair of small pale arms reach out and take the cat, which scares Kazumi. She enters the bedroom upstairs. Kazumi's screams and the cat's mewing are heard before the screen goes black.
Katsuya comes home to find the house untidy and his wife lying on bed unable to move or speak, her eyes wide open with shock. As he prepares to call for an ambulance, he senses another presence in the room and soon encounters the ghostly boy, Toshio. Katsuya asks who he is but gets no reply as the closet doors shake. Kazumi's eyes widen, her mouth opens, and she rises before falling back and becoming still. Katsuya huddles into a corner with fear and his facial expression suddenly turns evil. The shadow of something descending from the ceiling is cast on him.
Hitomi arrives for dinner and calls for Katsuya and Kazumi but receives no response. Upstairs, Katsuya carries Kazumi's limp body into another room. Hitomi hears the door closing and walks to the stairs and sees her brother sitting there. Katsuya is behaving strangely and keeps muttering something about his wife cheating on him and a child that isn't his. She asks where is Kazumi but Katsuya ignores her and pushes her out of the house. Back indoors, Katsuya walks up the stairs towards the room where his wife's body is, with an evil expression on his face. A silhouette of a woman's face is seen on the window of the room.
Hitomi is one of the last people to leave the office building. She unsuccessfully attempts to call her brother on her way out. On her way out, she hears strange shuffling sounds in the corridor, which seem to be coming from behind her. Slightly unnerved, Hitomi stops in the washroom, where her phone rings and identifies the caller as her brother. When she answers, a death rattle is heard coming from the mobile phone. In the cubicle next to her a provoking banging begins, Hitomi apologizes and hangs up the phone. A small teddy bear ornament falls from her handbag as she begins to leave the bathroom. As Hitomi reaches for it the cubicle door opens and an ethereal curtain of black hair moves ominously toward her, emitting the same death rattle she heard on the phone. Hitomi runs to the security office and asks the guard to investigate. She observes him via a surveillance camera in the office and sees him checking the corridor until he stops outside the washroom. The footage slightly distorts and a shadow from inside the washroom is cast on the guard. Hitomi screams and dashes out. The surveillance camera now shows no one in the corridor.
Hitomi hastily retreats to her apartment and enters the elevator. As the elevator ascends, the ghost boy Toshio's face is seen through the elevator window on every floor until Hitomi reaches her destination. At home, Hitomi receives a call from Katsuya, who says he is coming and asks her for her apartment number. Before she can hang up, her doorbell rings and she sees her brother outside through the peephole. She opens the door eagerly but finds the hallway empty. She hears the death rattle from the phone still in her hand and quickly throws it in the hallway and slams the door shut. She goes to bed and covers herself with the blanket. She switches on the television and sees the news. The screen and audio suddenly become distorted and the reporter's face twists into a Ghostface-like image and the death rattle is heard again before the television shuts down by itself. Petrified, she continues to hide in bed until she feels something and pulls it out. It's the teddy bear ornament she lost in the washroom. She throws it to the ground in fear. A human-shaped lump manifests from beneath the blanket at the far end of the bed. Hitomi lifts the blanket and sees a woman, who quickly pulls Hitomi towards her. A full shot of the room is seen and no one is on the bed.
When Rika does not return to the care center, her boss Hirohashi goes to the house to check on her. He finds Sachie dead and Rika in a state of shock. While investigating the house, detectives call Katsuya's cell phone and hear ringing coming from upstairs. They eventually track the sound to the attic, where they find the dead bodies of Katsuya and Kazumi. Further investigations revealed that people who had lived in that house either died mysteriously or disappeared. Rika claims she saw Toshio in the house but the boy cannot be found. Hitomi is missing and witnesses claim that they last saw her entering her apartment. Hirohashi is later found dead under the sink in a washroom.
The investigators turn to a retired detective Toyama for answers. Toyama previously took on a case on a man called Saeki Takeo, who murdered his wife Kayako and son Toshio in that house five years ago. While viewing the security video tape from Hitomi's office building, Toyama sees the guard being taken into the washroom by a shadow. As he continues watching, he sees the dark figure of a woman emerging from the washroom and walking down the corridor, until a face suddenly rises directly in front of the camera and stares into it. At home, Rika is lying on bed when she suddenly sees Toshio beside her, and hears the death rattle sound coming from above her. The ghost Kayako is behind her, bending over and staring at her.
Convinced that the house is the source of all the mysterious incidents, Toyama goes there with gasoline, intent on burning it to the ground. While inside, he experiences a vision of his 12 year old daughter Izumi in the future as a teenager. She is leaving the house when she stops for a while upon seeing her father. Toyama goes upstairs and sees Izumi's friends before they are attacked by an unseen force. The atmosphere changes back from bright to dark, and Toyama sees the ghost Kayako crawling towards him. In fear, he half-staggers and half-falls back down the stairs. Just then, the two investigators who came with him appear and ask him what happened. Too frightened to speak, Toyama manages to get up and scrambles out of the house as Kayako slowly creeps down the stairs towards the two petrified investigators.
Several years later Izumi is a teenager and her father, Toyama, long since dead – another Ju-on casualty. As Izumi and two friends walk to school, she notices a missing persons poster featuring three of her friends. She was with them the day they disappeared from a house rumored to be haunted. Izumi feels guilty because she ran away from the house in fear, leaving her three friends to their fates. At school the girls notice that there are no photos of Izumi from a recent event and complain to their teacher about it.
Izumi's state of mind has been deteriorating since the day they went to that house. She keeps the curtains closed, covers her head with a hood, and clutches a pillow. Her friends visit and are disturbed by Izumi's condition and her mother's strange behavior. One of them draws the curtain and sees that the windows are covered with newspaper. Izumi shrieks. After she has calmed down, she relates to them about her trip to the haunted house and her feelings of guilt. As the girls leave, Izumi's mother tells them that her husband also exhibited the same behavior before his death.
The girls remember the photos they brought to show Izumi and understand why the teacher did not post any pictures of Izumi after looking at them. In every photo, Izumi's eyes are eerily blackened out, as were the eyes of her three missing friends.
Back in her bedroom, Izumi is having a vision of her dead father when she realizes that there are newspaper scraps on her bed and moves quickly to stick them back on the window. When she pulls back the curtain, she sees her three missing friends, faces pale and grey, staring at her through gaps in the newspaper. She flees in terror, with the three ghosts in hot pursuit, and ends up in the room her father was in in her earlier vision. She uses various items to block the door but that does not deter the ghosts. Izumi panics and huddles back right towards the Shinto altar in her house. Suddenly, ghostly hands, belonging to Kayako, emerge from behind and drag the kicking and screaming Izumi into the altar as the three ghosts continue to approach. The faces of Izumi and her father are seen at the altar before they materialize into the darkness.
In the bonus material of the DVD, film director Takashi Shimizu explained that he intended to include a similar effect of the three friends' faces materializing into the shelves in the room, but he dropped the idea because he thought it would either be ridiculed or take away the focus of Izumi's death and place it on the entire group instead.
Before Izumi's death it is apparent that this scene takes place after the events in the earlier parts, because at one point her mother is watching a news report on the discovery of Rika's dead body. It is also theorized that Izumi is an unmentioned character in the last segment of Ju-on 2 (2000), because the vignette is titled "Saori", the name of one of her friends who disappeared in the haunted house. Saori was the "ringleader" of the group.
Rika has more or less recovered from the trauma of her experience in the house. She arranges to meet an old friend Mariko for lunch. An old man plays peek-a-boo with an unseen person just outside the care center where she still works. Another worker, assuming that the man is feeble-minded, tries to join in the game and is rebuffed. The old man resumes his game with his unseen playmate, a sight which makes Rika uneasy. Toshio's reflection is visible in the glass, revealing the identity of the unseen playmate.
While having lunch with Mariko, Rika feels something under the table and sees Toshio when she looks. She screams in terror. At home, Rika has weird experiences - while in the shower, she felt a hand on her head but there is no one inside but her; and she dreamed about several black cats in her bedroom. Rika later receives a call from Mariko, who tells her she is visiting a student who hasn't been to school for a long time. Rika suddenly hears a cat's mewing on the phone and the line goes dead.
Rika comes to horrifying realization that Mariko is in the cursed house. She hurries there but is too late to help as she sees Mariko's body being dragged up into the attic. She follows Mariko's path and peers into the attic through an opening at the top of the closet, and sees Kayako crawling towards her. Rika panics and dashes down the stairs to the door. On the way she runs past a mirror and caught a brief glimpse of an unfamiliar reflection where her own should be. She stares at her own reflection and covers her face in the same manner as the old man playing peek-a-boo. Doing so reveals Kayako in the mirror, staring back at her through her fingers. After a frightening vision of Kayako emerging from her chest, Rika hears thumping noises overhead, and realizes that something is moving down the stairs. The ghost of Kayako, inside a blood-soaked plastic bag, is slowly creeping towards her. She seems to be reaching out for help. Rika covers her face with her hands again and to her horror, she sees herself as Kayako again. She comes to the terrible realization that she is destined to play out the curse.
Kayako disappears after this revelation, and Rika hears footsteps coming from the stairs. She looks up and sees Kayako's husband Takeo, as a yurei, the source of the Ju-on, striding towards her. Looking upstairs, she can see Toshio peering at her through the banisters in the same fashion he watched his father kill his mother. As Rika remains rooted to the spot in fear, Takeo reaches for her, his hand covered with blood, and the screen goes black. Rika's death is portrayed more graphically in a deleted scene.
The scene then turns to the streets - abandoned and littered with 'missing' posters. Rika's body is seen wrapped in a plastic bag inside the attic. She now has long hair just like Kayako. As the camera zooms in on her face, her eyes open and she makes the same death rattle as Kayako. This scene is presumably set years later, perhaps in the same timeline as the "Izumi" chapter, as evidenced by the news report in that part.