InuYasha's father defeated a powerful Chinese moth yōkai named "Hyōga" 200 years ago. Now a Shikon no Tama fragment has freed "Menōmaru", Hyōga's son. He seeks revenge for his father's destruction and to free the power of his father sealed away with him. Menōmaru and his minions "Hari" and "Ruri" begin battling with Inuyasha. Sango and Miroku have their hands full dealing with the duo, Ruri having copied Miroku's Kazāna and Hari having stolen Sango's faithful companion, Kirara. Menōmaru curses Kagome so she turns against Inuyasha.

When Menōmaru is finally able to access the power of his predescessors, sealed away by Inuyasha's father, he becomes the new Hyōga and exponentially more powerful as each generation gains the power of all the preceding generations. Hyōga soon begins to change the essence of time and space as he's absorbing the souls of countless people in order to fully merge himself with his family's power. Kikyō throws Kagome down the Bone Eater's Well in an effort to get rid of her once and for all since through Menomaru's manipulation of time she thought that Kagome would be trapped in the future. The connection shared between Inuyasha and Kagome is enough to forge a bridge between the ages so that he can communicate Kaede's message as to how Kagome can return to the past even with the well regressing from wood blocks to saplings. She triumphantly returns to the past and she and Inuyasha head off to defeat Hyoga.

Sesshomaru briefly appears realizing that his father's ancient enemy is fighting with his half brother, but chooses not to interfere. For the first time in the series he has a conversation with Kikyo. Kikyo somehow knew he was Inuyasha's older brother, and Sesshomaru knew about her relationship with Inuyasha as he told Jaken and Rin that she was nothing, but a dead miko. He leaves warning her that only he will kill Inuyasha.

Miroku and Sango manage to defeat Hari and Ruri and join Inuyasha, Kagome, and Shippo in a stand against Menomaru. However, he emerges from his cocoon as the new Lord Hyoga, a moth god with far more power than his father ever had. Only with the power of Kagome's sacred arrow and Inuyasha's Backlash Wave (Bakuryuha) attack do they manage to find a way to destroy Hyoga for good.