Kagome hears InuYasha telling her not to make any wishes and remembers her grandfather telling her that the one correct wish will cause the Shikon Jewel to be banished from the world forever. Inuyasha battles his way to her and after they share a loving kiss, she makes her wish: that the Shikon Jewel would vanish forever. The jewel shatters and the demons inside it disappear, as do Naraku and the priestess Midoriko.

Three years later, Miroku and Sango’s third child is about to be born, Shippo is training to become a full-fledged fox demon, and Kohaku is dedicating himself to helping those affected by demons.
In the present day eighteen-year-old Kagome, who is now about to graduate from high school, recalls how InuYasha had rescued her and how that the Bone Eater’s well had stopped working since then. Inside the shrine, she realizes that her own feelings are what was blocking the well and wishes she could see InuYasha again. The well reactivates as Kagome’s mother joins her. Kagome bids her farewell and enters the well. InuYasha quickly catches her scent and meets her, taking her by the hand. Kagome’s family continues to live as they always have – Souta tells his friends that his sister got married right after high school and moved away. Hojo is dating the underclassman who was hitting on him earlier in the series. All of Kagome’s friends are in college. In the feudal world, Sango and Miroku live with their kids – two twin girls and a boy – in Kaede’s village. Kohaku is off to train to become a strong demon slayer. Myoga now lives with Totousai. Shippo is training to become a strong demon. Rin lives with Kaede in the village where Sesshomaru is shown paying her visits, along with Jaken, bringing Rin all kinds of gifts. Koga and Ayame are married. Kagome is adapting to her new, permanent life in the feudal era as Inuyasha’s wife.

Naraku gives his soul to the Shikon Jewel and transforms. As his miasma strengthens and increases, Kohaku, Rin, Jaken, and Kirara are forced to leave, giving their masks to Sango and Miroku. As the others exit Naraku’s body later, they find themselves over the Bone Eater’s well near Kaede’s village. Naraku tries to protect himself with a dark barrier, but Kagome pierces the Shikon Jewel with an unusually strong and powerful sacred arrow, dealing him a fatal blow. They learn that his true wish was Kikyo’s heart – a wish the Shikon Jewel never granted. As he dies, Naraku is purified and Miroku’s Wind Tunnel vanishes. As the group celebrates their victory, a Meido opens behind Kagome and pulls her in along with the well. Kagome finds herself in front of her high school, and begins hanging out with her friends and dating Hojo with no memories of Inuyasha or the others. However, a nagging sense that something is wrong keeps bothering her, and when she touches the Goshinboku, her memories return and the spell is broken. She awakens surrounded by darkness. The Shikon Jewel tells her that she will stay there forever unless she makes a selfish wish to return to her own time. InuYasha uses Meido Zangestuha to jump into the darkness after Kagome. As he battles through the demons of the Shikon Jewel, he yells to Kagome not to make any wishes yet, for if she does, she will forever remain inside the Shikon Jewel, battling demons for an eternity.

Naraku releases more miasma, while Inuyasha uses Tetsusaiga’s barrier to protect himself, Kagome, and Miroku. Sango arrives riding Kirara and throws her Hirakotsu, but it absorbs too much of the miasma and Sango falls through a hole Naraku opens in his flesh. Miroku follows and she decides to die with him there. When Kagome questions Naraku about whether his real wish has come true, he becomes enraged. As he absorbs the jewel, he begins transforming and spreading spiderwebs around the area. Inuyasha unleashes Meido Zangestuha, which takes on the form of slashing blades due to the different nature of his sword. Byakuya slashes Kagome across the back with his blade, but strangely it leaves no wound. Inuyasha quickly attacks and kills Byakuya, who states that he has fulfilled his purpose. Miroku and Sango fall again, but are joined by Shippo. Together, along with Sesshomaru’s group, they join Kagome and Inuyasha in the final battle against Naraku.

After Magatsuhi has been destroyed, Kagome’s spiritual powers and abilities are released to their fullest extent. The Shikon Jewel once again has a spark of pure light within it. Naraku tries to eliminate the pure light by sending out illusions, one to make Sango destroy Rin in the name of saving Miroku from the horrible death his father suffered, and one to trick Miroku to using his Wind Tunnel for one last time. Inuyasha makes it in time to prevent Miroku from opening the Wind Tunnel. Kagome’s sacred arrow pierces Naraku and destroys all the illusions. Inuyasha, Kagome, and Miroku sees Naraku’s true body as miasma starts to fill the air. Inuyasha sends a Meido. Byakuya uses a strange blade to harness some of the Meido’s energy.

Sango realizes that Miroke’s Wind Tunnel is getting larger and the two are taken in by an illusion of Miroku’s father being sucked in by his Wind Tunnel. InuYasha momentarily regains his consciousness when he hears Kagome’s voice, but his heart is devoured by the Shikon Jewel’s poison, and he turns into his demon form once more. As Miroku and Sango run away from demons, Miroku uses his Wind Tunnel once more to save Sango. He tells Sango that they should part then because of his Wind Tunnel about to devour them both, but Sango follows after him. Rin gains her consciousness again and soon runs into InuYasha, in his demon form. After InuYasha attempts to attack Magatsuhi, he is instead possessed by him when Sesshomaru and Kagome arrive. InuYasha, possessed by Magatsuhi, and Sesshomaru fight, while Kagome attempts to retrieve Tetsusaiga, which Magatsuhi has released because he realizes that the Tetsusaiga acts as the link which allowed InuYasha to keep a bit of control. As Kagome pulls the sword, she falls over the cliff, but is able to hold onto the side. Kagome calls to InuYasha and he gains some of his consciousness back and Tetsusaiga calls to InuYasha once more. He gains his control back and as Magatsuhi leaves InuYasha’s body, he attempts to take over Kagome’s. Then, InuYasha’s demonic energy draws Magatsuhi out of both of their bodies, and Sesshomaru uses Tenseiga to destroy him once and for all.

Kagome learns that she has been put on the waiting list for high school, and is happy about the fact that she was accepted at all. She and her friends graduate from middle school. Hojo wishes to give Kagome his second button, a tradition in Japan which means that the boy likes the girl, but she leaves before he can. Back in the Feudal Era, Naraku has absorbed the power of the Shikon Jewel and a dark cloud spreads over the land. InuYasha’s group leaves to defeat Naraku, leaving Shippo behind. As they find Naraku and Byakuya in a cloud of miasma, they see Sesshomaru enter Naraku’s body in search of Rin. As InuYasha’s group enters, Miroku pauses to propose to Sango. They soon realize that though they are breathing in the miasma, it is not harming them because the Shikon Jewel wants to capture their souls first. Kagome and InuYasha search for the defiled jewel, after Miroku and Sango are captured. As InuYasha gets closer to the Shikon Jewel, he turns into a full-blooded demon and attacks Kagome. Naraku offers Kagome a miasma-coated arrow to save herself with, but she refuses. InuYasha attacks again, throwing her off a cliff. Naraku says InuYasha will kill her, just as he killed Kikyo.

Kohaku successfully drives Magatsuhi out of his body just as Sesshomaru arrives, who manages to use Tenseiga to cut Magatsuhi in half, destroying part of him. Naraku then tries to take Kohaku’s shard himself, but Sesshomaru attacks with his Bakusaiga, which causes Naraku’s body to explode. Meanwhile, a red demonic aura passes from Miroku’s body into Rin’s. Now possessed by Magatsuhi, Rin flies off with a demon. Later, Naraku manages to capture Kagome and demands InuYasha’s group gives him Kohaku’s shard in exchange for her. Kohaku spots a sacred arrow on the ground and hides it, before offering himself to Naraku. When Naraku grabs him, Kohaku stabs the arrow into the spot where Moryomaru’s diamond armor is, shattering it. Naraku escapes in a miasma cloud. Sango and Kohaku hug one another in celebration, but then a piece of Naraku’s flesh stabs Kohaku in the neck and takes the shard, leaving Kohaku’s empty body behind. Naraku completes the Shikon Jewel, but Kohaku is brought back to life by Kikyo’s light after he hears Sango crying for him. With the Shikon Jewel now complete the final battle between light and darkness, good and evil begins.