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The main plot centers around the confrontation between Otoha and Eko. Character interactions are mainly with yōkai and mikuras. The show employs a cold open featuring a battle between two karas before the title sequence is shown. Eko kills the unnamed karas, and the expositions at the end of the fight announces Eko's plan to remake Tokyo. The story moves ahead three years, introducing Nue as he arrives in Shinjuku to free his brother from Eko's hold, and Otoha in a hospital from heavy injuries sustained in a burglary revealed in later flashback sequences. The early parts of the show proceed in a "mikura of the week" fashion as Otoha (as a karas) and Nue separately fight against Eko's minions. When the mikuras attack hospitals across the ward to locate Otoha's body, Otoha and Nue work together to kill the weasel-like Kamaitachi. The spider-like Tsuchigumo, however, abducts Otoha's Yurine and deprives him the power to turn into a karas.
After splitting up with Otoha, Nue attacks Eko's base. He ruptures the chambers holding Yurine and Eko's body, but falls into Eko's trap. Eko kills Yurine and reveals capturing Nue completes the final part of his plan. Otoha rescues his fellow burglar, Reiji from their former yakuza gang. Yakuza reinforcements, however, kill Reiji, and Otoha kills the gang leader, his brother-father in retaliation. Homura, another city's karas rescues Otoha from the remaining yakuzas. When Eko launches the last stage of his plan and ravages Tokyo with metal tentacles, Otoha ends up among human refugees in a shelter the chief of police had commissioned.
A side story takes place within the main plot, focusing on the humans affected by the ongoing events. The characters, Sagisaka Minoru and Narumi Kure are detectives in Shinjuku's Intervention Department. Portrayed in a similar manner to Mulder and Scully of The X-Files, they investigate serial murders for supernatural evidence. Mikuras kill and suck the blood of these victims to replenish their strength, but no one except Sagisaka seriously believes in supernatural involvement. Sagisaka is bent on vindicating his daughter, Yoshiko who has been committed to a psychiatric hospital for claiming a mikura committed the mass murder she had survived. Sagisaka's and Kure's investigation brings them to the survivor of another attack, Hinaru (ヒナル?). Sato had created her to represent the best qualities of rural migrants looking for better opportunities in the big cities. When Eko starts the last part of his plan; Kure, Hinaru, and the Sagisakas arrive in the shelter Otoha is in.
The chief of police reveals himself as Ushi-oni and starts eating the humans trapped in the shelter. Yoshiko recognises him via flashbacks as her attacker. Sagisaka sacrifices himself to push his daughter away from Ushi-oni's attack. Otoha confronts Ushi-oni to defend the others, and suffers heavy injuries. A climatic sequence depicts Otoha's collapse from his wounds; but his conviction in protecting the city and its inhabitants, resurrects his Yurine. Yurine restores Otoha as a karas and he slays Ushi-oni. While karas from other cities observe the showdown between Otoha and Eko, Homura steps in to help Otoha. Eko conjures and merges with a huge white dragon. Otoha breaks off to respond to Nue's call. He carries out Nue's request to kill him and his brother, depriving Eko of his new power source and stopping his entire scheme. Confronting the depowered Eko on equal terms, Otoha's final stroke shatters Eko's blade and deals him a mortal blow. Eko claims Otoha will understand his reasons after 400 years as a karas. Despite defending his human body and Yurine from soldiers ordered by the Deputy Governor to shoot them, Otoha proclaims as Tokyo's appointed agent, he will protect all its inhabitants no matter their inclination. While Hinaru stays behind in Shinjuku as it is being rebuilt, Kure and Yoshiko have had enough and leave for the countryside.
In the post credits, Eko's boot is founded by an unknown character.
- TV Show Canceled/Ended -
There is no Next Episode of Karas planned.