Two hundred of years before the story of Inuyasha we know of Inuyasha began...

Mortally wounded from a battle with Ryukossei, the Lord of the Dogs (Inu no Taisho) and his son, Sesshoumaru, meet for what will be their last time. With his heart set on protecting Izayoi, the woman he loves (something Sesshoumaru appears not to agree with), Inu no Taisho goes to the castle of Setsuna Takemaru. There, he finds Izayoi murdered, after it had been discovered she'd given birth to his half-youkai boy. Takemaru orders the castle to be burned to the ground in order to kill the mononoke (animal spirit). After using the power of Tenseiga to keep Izayoi's soul in This World, Inu no Taisho then sets his sights on confronting Takemaru himself. Holding back Takemaru buys enough time for Izayoi to escape with his son, but neither man makes it from the burning castle.

Izayoi and the newborn make it to safety, and the child is given a name by the request of his father.

Inuyasha.

In present-day Tokyo, Grandpa Higurashi introduces the family to an ominous 700-year-old sword. Written on its scabbard are the words "Murakumo no Tsurugi" (cloud-mass sword). The sword is then revealed to actually named "Souunga," (also meaning "cloud mass sword"). It was sealed long ago, but now it appears that the seal has been broken...

Inuyasha and Kagome, on their way home from school, encounter the now-sentient sword, and its guardian youkai, named Saya. When Inuyasha tries to hold the sword himself, the powerful jyaki surrounding it takes control of his body and begins to transform him into his full-youkai form. Before Kagome or anyone can intervene, Inuyasha runs back to the well, along with the sword...

He returns to the Sengoku Jidai, battling with the sword for control of his own body. A nearby village, however, becomes the first site of attack; under the control of Souunga, Inuyasha begins to tear through the village using the sword's youki attack, "Gokuryuuha." Throughout this, however, Sango, Shippou, and Miroku realize that Inuyasha is still trying to restrain himself from attacking. Following the attack, Inuyasha retreats into the mountains. Kagome and the others regroup and go to find Inuyasha. When they discover him, he's still under control of Souunga, and locked in battle with Sesshoumaru. Desparate to free him from the sword's powers, Kagome uses the osuwari beads to try to call his spirit into submission. It succeeds in releasing him from the sword, but also results in destroying the necklace from around his neck...

Soon after, Souunga's powers seeks out Takemaru humself; using the body of an ogre, the sword finds his soul at the boundary between This World and the Next World. Using Sesshoumaru's arm (which had been lost when Inuyasha had dismembered it in battle) to weild Souunga, he becomes a powerful creature and returns from death. There, he plans to seek out Izayoi's half-youkai child, Inuyasha and those related to the Lord of the Dogs. Using the sword's powers, Takemaru begins to assemble an army of undead...

Sesshoumaru and Inuyasha, now aware of this new threat, go to confront Takemaru at his fortress. All of their companions natrually follow them, as well: Kagome, Sango, Miroku, Shippou, Jaken, Rin, along with Toutousai and Saya. Things for the brothers don't seem to be working at all against the undead army, however. Takemaru takes Rin and Kagome captive, seeking to destroy them for being like Izayoi and being involved with youkai...

Kagome and the others try to convince Inuyasha and Sesshoumaru that the only possible way for Takemaru and Souunga to be defeated is for them to combine the powers of Tessaiga and Tenseiga. When Souunga itself becomes the enemy, it's a matter of the brothers being able to swallow their pride long enough to work together just this once...