50 years ago, There was a beautiful prestest named Kikyo, who protected a powerful jewel called the shikon no tama from evil.  Inuyasha had been seeking the jewel in order to change from hanyou (half demon, half human) into a full demon.  He had fallen in love with Kikyo, and she had fallen for him as well.  Inuyasha was willing to  give up his demon side to be with Kikyo.  The two had made plans to use the shikon no tama to make Inuyasha a full human, however, they were tricked into hating one another by another youkai named Naraku.  Naraku, disguised as Inuyasha, had mortally wounded Kikyo. He had also disguised himself as Kikyo had shot arrows at Inuyasha.  In response to this 'betrayal', Inuyasha had attacked Kikyo's town and stolen the shikon no tama, but before he could escape, Kikyo had used her last breath to seal Inuyasha with one of her arrows.  Kikyo's younger sister burned the shikon no tama with Kikyo's remains.

Kagome learns she is the reincarnation of the prestest Kikyo.  She finds herself in the position of protecting the shikon no tama that came forth from her own body, but ends up breaking it into many shards when she kills a demon that has stolen it.  She then vows to help find the shards and return the jewel to normal.  Initially because of a spell by Kikyo's sister (now an old woman), but later, of his own will, Inuyasha travels with Kagome in search of  the shikon shards, inevitably fighting many demon who have found the shards and are using their power.  Inuyasha's older brother, Sesshoumaru, a full demon, hates humans, and despises Inuyasha for being a hanyou.  He fights with Inuyasha from time to time over inheritances from their dead father and other issues.

One of the enemies decides to bring Kikyo back and raises her body.  She regains part of her soul, however, to remain on earth and make her body move, she must gather and use the souls of the dead.  While retaining some of her integrity and ideals as a prestest, Kikyo is now evil just by how she is living, surviving on pure hate and vengeance.  Inuyasha is torn between his love for, and devotion to Kikyo (despite her present condition) and the feelings he had developed for Kagome.  He protects Kagome with his life, and becomes jealous when another man pays attention to her, however, he won't come out and admit he likes her.  Kagome and Inuyasha eventually form a group of friends as they meet others with a common goal.  They are joined by a fox cub named Shippo (whose father was killed by demon possessing a shikon shard), a Buddhist monk who has an air void in his hand (put there by Naraku), a demon exterminator named Sango) whose whole town was destroyed by demons), and her kawaii pet, Kirara.  The group travels together, becoming a close knit group of friends.  They Fight many demon together in pursuit of their two common goals: Revenge on Naraku, and regaining and reuniting the shards of the shikon no tama.