In Kamome Academy, there are seven mysteries. The seventh, and most famous one of all, is "Hanako-san of the Toilet", a ghost girl said to reside in the third stall of the girls' bathroom on the third floor, with the ability to grant a single wish for the appropriate price. Yashiro Nene, a first-year high school student, approaches the cubicle intending to wish for a happy romance with her crush and popular senior student Teru Minamoto, only to realise that the "Hanako-san" of the rumours is actually a boy! Yashiro and Hanako work together, consulting tips and tricks from a self-help book, only to fail every time. As Yashiro laments Hanako's lack of ghostly magical items to help her, she discovers a pair of mermaid scales from him that are traditionally used in match-making: the people who swallow these will be cursed greatly, but tied by an unbreakable bond. Yashiro swallows the scale but inadvertently overhears Teru revealing that he likes a girl. Without anyone to share the curse with, she turns into a fish – the servant of a monstrous mermaid. Yashiro apologises for her behaviour, realising that she was actually fine with anyone so as long as she was loved. Hanako defeats the mermaid as it comes to collect its new servant, and agrees to swallow the other scale, reducing the curse on her so that she will only turn into a fish when she comes into contact with water, and allowing him to manifest a physical body. At the same time, she now shares a bond with someone, fulfilling two of her wishes.

Yashiro becomes Hanako's human assistant and is forced to spend her afternoons cleaning the toilets for him. Incidents of people losing things suddenly spike in school, culminating with even the loss of the school's locker doors. Aoi Akane, Yashiro's best friend and the school's most popular girl, tells her of the recent rumour "Yousei-san", horrifying faeries that purposely steal from humans, and the warning never to look these apparitions in the eye. Yashiro accidentally stumbles upon a trail of the lost things and espies a monstrous creature with multiple eyeballs, but Hanako saves her from it. The creature splits into numerous small, pink rabbit-like supernaturals known as Mokke, kleptomaniac supernaturals that have lived peacefully with humankind for thousands of years. As supernaturals are unable to go against their rumours lest they disappear from the world, Hanako asks that Yashiro change the Mokke's rumours for him that is charged with the duty to maintain the school's supernaturals. Yashiro starts calling Hanako with a "-kun" as a suffix to show that they are friends.

A third-year middle school student and young exorcist Kou Minamoto arrives at the rooftop to exorcise Hanako. As Yashiro defends him, she is disturbed by Kou's warnings that Hanako is a dangerous and murderous spirit, who uses a kitchen knife as his weapon of choice due to him having killed someone with it. Although Kou initially gains the upper hand with his Minamoto family's sacred lightning weapon, Hanako successfully incapacitates him and expresses hope in the young boy's potential. He then vows that he will not disappear because God gave him this role of managing supernaturals to atone for his sins when he was still alive. Yashiro expresses her concerns for him after the skirmish, to which Hanako comments that she can still be friends with a murderer and walks off cheerfully. It is only then that Yashiro realises she doesn't know anything about him.

To cheer Yashiro up, Aoi tells her of No.2 of the Seven Mysteries, the "Misaki Stairs", a staircase outside the art room of the school where the fourth step is the entrance to the world of the dead. Anyone who enters is then shredded to pieces and has their blood dripped on the staircase at twilight. The next day however, Yashiro discovers that Aoi's very existence has disappeared in the school, from her items to even everyone's memories of her. Frightened and confused, Yashiro seeks out Hanako's help, and Kou also reveals how his classmates Yokō and Satou are missing. Hanako guesses that the students have wandered into "boundaries", areas of the Far Shore where apparitions and forgotten things reside separate from the Near Shore, where the living stay. Of the seven boundaries in the school that link to the spirit world, one of these gateways is the fourth step of the Misaki Stairs, guarded by the second mystery. The three venture into the Japanese shrine-like environment of the boundary. They are greeted by a phone call from the mystery herself, introducing herself as a schoolteacher named Misaki that died here, and requests that they find her body parts. Finding one body part will open a single gate for them reaching towards the top of the boundary. Should they fail to do so within the time limit, a huge pair of scissors starts chasing them, along with faceless Japanese dolls. They resolve to destroy No.2's yorishiro, a precious object that gives power to the mystery, so that she will relinquish her boundary. As they approach the final gate, Yashiro wonders who is the one making the phone calls if they need to find "Misaki"'s body for her.

The three encounter the body of a hideous doll, its parts assembled by them. They are then greeted by the caller, a beautiful woman dressed in traditional Japanese clothing, whom Hanako recognises as No.2 of the Seven Mysteries. As No.2 tries to make the doll walk, it fails and she shows them the bodies of all those who wandered into her boundary and failed to accomplish the same task she made them do, now carved into faceless dolls. Hanako and Kou begin fighting against her, but they are at a disadvantage due to the area being her territory, hence amplifying her power. Deducing that the deepest part of the barrier is likely to be below the submerged ground where they had been standing on, Hanako pushes Yashiro off a cliff, and she awakens in a sunlit shrine. Yashiro finds an exercise book with diary entries written in sloppy children's handwriting, where every entry contains teacher's comments from "Misaki". Each page details the child's growth as she becomes more cheerful and outgoing, and her handwriting improves as well. About halfway through, the teacher's comments disappear and each entry begins recording a day where Misaki doesn't return to the shrine, as well as an incident where a teacher fell down the steps and died. The book ends on a chilling note as the child decides to "make a Misaki". Just then, No.2 arrives, and despite Yashiro's pleads that Misaki would never wish for her to do such a thing, remains stubborn and determines to slice her up, but Hanako arrives to protect her. Yashiro successfully locates a photograph of a class of schoolchildren and Misaki in the shrine as No.2's yorishiro and destroys the seal upon it, causing the boundary to collapse. Returning to the school, Hanako reveals the real identity of No.2 to be a talking fox statue called Yako, and kisses Yashiro on her cheek, calling it a "protective charm". Kou, who had been turned into a stuffed doll, is left forgotten.

Meanwhile, a black crane that has been watching the three returns to its masters, a boy and a mysterious girl who is likely the source of rumours around the school.

Yashiro is confused and embarrassed to face Hanako after the kiss, which both her and Aoi misinterpret as Hanako liking her romantically. The recent increase in school couples also prompts Aoi to tell Yashiro of the rumour of the Confession Tree, a magical tree where anyone who confesses underneath it will become a couple, even those of the same gender. Adding on to her fantasies, Hanako confesses to Yashiro under the Tree, but prompts Yashiro to reject. This summons a kodama supernatural from within that has been the source of all the odd couples in school, which Hanako defeats and reduces to the size of a broccoli. As Yashiro leaves totally heartbroken and embarrassed, Hanako apologizes to her for getting her hopes up, as the kiss was actually really just a protective charm to ward off apparitions.

Yashiro decides to find out more about Hanako herself. On the school rooftop, they encounter Teru, who is revealed to be Kou's older brother. Teru gives the indecisive Kou one last chance to exorcise Hanako. Failing to get information from Hanako about himself, Yashiro turns to library books, encountering the boy and the girl who have been watching them, although this is unbeknownst to her. The girl encourages Yashiro to seek out No.5 of the Seven Mysteries if she is truly keen on learning more about Hanako. Aoi tells Yashiro of the fifth mystery "the 4 o' Clock Library", a special repository in the library filled with books of the past, present and future of every member of the school, and can only be entered at 4 o' clock, hence the name. Of these books, the white ones are about the living, the black about the dead, and the red ones are simply forbidden books. As Yashiro contemplates finding Hanako's book, the mysterious girl and boy watches on the scene, a figure resembling Hanako behind her.

Accompanied by Kou, Yashiro seeks out the 4 o' Clock Library. Instead of finding Hanako's book, Yashiro glances at her own and in the "Future" section, sees herself finding out Hanako's real identity and learns his real name: Amane Yugi. However, the pages turn red and a humongous shadow-like reflection of herself appears to devour the both of them, although Hanako arrives just in time to slay the creature. They then meet No.5 of the Seven Mysteries and the curator of the library: a spider-like supernatural named Tsuchigomori who displays an outward persona as a teacher in school. As the leader of the Seven Mysteries in charge of maintaining balance between the Near and Far Shore, Hanako deduces the existence of a traitorous supernatural changing the school's rumours, proposing to destroy every Mystery's yorishiro temporarily as a safety measure. After a brief skirmish where Tsuchigomori forces Kou and Yashiro to blurt out their most embarrassing secrets, he lets only Yashiro follow him to the deepest part of the Boundary, where she destroys his yorishiro. Similar to the Misaki Stairs incident, Yashiro views the memories within it and sees Tsuchigomori as a teacher tending to the wounds of an alive Hanako, or Amane. As a student, Amane always got injured mysteriously and had a great passion for astrology, although he vows to give up his future instead, gifting Tsuchigomori a "moon rock" believed to be a real piece of the moon that the former has safeguarded as his yorishiro till today. Waking up in the infirmary, Tsuchigomori reveals that Amane is the only person who has ever changed his predetermined future, and is still honouring his promise today by staying in the school as a supernatural.

Yashiro has no idea how to face Hanako after learning more about him. Recalling that he enjoys donuts, Kou asks for Yashiro's help in making them and the two grow closer, promising to support each other in their quest to find out more about Hanako. Kou stands up to his brother and declares that he will watch over Hanako and learn more about him instead of exorcising him straightaway, prompting Teru to continue observing the situation from afar for now. On the rooftop, Yashiro offers a happy Hanako his donuts, although their peace is interrupted by an unexpected guest that looks and sounds exactly like Hanako, traumatizing him greatly. In the broadcast room, the uninvited guest is revealed to be Tsukasa, Hanako's younger identical twin brother, who is the perpetrator behind the altered school rumors, alongside the mysterious girl Sakura Nanamine and a boy Natsuhiko Hyūga. Sakura spreads another rumor about a ghost boy haunting the middle school shoe lockers, which Kou catches and determines to help sever his ties to the Near Shore.

Kou has his work cut out for him as the ghost, Mitsuba Soūsuke, is a girly, narcissistic and cocky young boy that loves nothing more than to insult him. Believing his regret to be taking a photo of a certain something, Mitsuba goes around school, choosing to take photos of scenery, flora and fauna rather than people. Kou's good friend Yokoō espies Mitsuba's camera in Kou's hand and reminds him of the time when they were first-year middle school students together in the same class, until Mitsuba died in an accident just last winter. Mitsuba reveals that due to bullying in elementary school he resorted to becoming a quiet, shy boy in middle school, but that backfired and made him a plain wallflower unable to make friends instead, to the point where nobody remembered him even after he called out to them at the shoe lockers. Kou assures Mitsuba that the two of them can be friends even after one of them is dead, to which Mitsuba responds by taking a secret photo of Kou, calling it "something precious to me". They are interrupted soon by Tsukasa, who turns Mitsuba into a gruesome half-supernatural revolving around the rumour of a bent-necked ghost boy hovering around the lockers, in response to Mitsuba's real wish: to have friends and stay with them forever. This forces Hanako to kill Mitsuba, who tells Kou that there is no future for the dead. At home, Kou develops the photos Mitsuba took and finds the one of himself before crying next to Mitsuba's camera on his bed.

Yashiro is kidnapped to have tea with Sakura, and the two end up grouching about their own contracts they have made. However, this is all just a ruse to have her let down her guard, and Yashiro ends up being chained to a chair and drowned into a place of nowhere — a place that is neither a Boundary nor a part of the Far or Near Shore. Because it is nowhere, it is also a place that can lead to anywhere, with numerous doors leading to different destinations all over different worlds and across time. Together with Natsuhiko, who was also dragged in, they experiment with different doors that are familiar per Hanako's orders, who has managed to contact them via radio. Natsuhiko quickly winds up being dragged into a random door carelessly, and Yashiro manages to locate a door resembling that of the school's homeroom. She meets Amane on 18 July 1969, who was injured and crying in an empty classroom. Amane leaves quickly, but drops a key with a rocket keychain on it that she picks up, just as Hanako locates her. Returning to the girls' bathroom, Hanako apologizes for ruining the donuts and welcomes her home, with Yashiro choosing to keep quiet about the key and find a way to protect him. In a post-credits scene, Tsukasa is seen morbidly doodling a drawing with blood and speaking to a figure resembling Mitsuba.

Yashiro informs Hanako and Kou about a certain occurrence of weird arms photobombing of some of the school photos. Later on, an arm drags Yashiro to one of the mirrors within Hanako's domain: the bathroom. Then Yashiro transports to the otherworldly boundary within the spirited mirror. Along the way, she encounters Mitsuba and thought of him as her prince charming. Much to dismay, the latter just insulted the former of her 'daikon' legs. The case worsens when Yashiro encounters mirrors with the reflections of her comrades, insulting her ankles. During Yashiro's ordeal, Kou and Hanako struggled to enter to the cursed mirror. As for Yashiro and Mitsuba, they got a hard time dealing with the School Wonder of the boundary. Tsukasa then goes to the rescue and brutally murders the Wonder, for Mitsuba's sake.

After Tsukasa murdered the former wonder, he then grabs the "heart" of the apparition to feed it to Mitsuba, for the latter to be the new School Wonder of The Hell of Mirrors. Kou and Hanako asked help from Tsuchigomori and Yako to enter the said boundary. Mitsuba doesn't want to consume the heart being offered to him and Yashiro tells Tsukasa to stop forcing. Tsukasa was about to hit Yashiro in the floor but then the boy remembers to be gentle with girls and instead, sedates her. Kou and Hanako successfully enters the boundary and then they encountered an overpowered Mitsuba. Tsukasa then bribes Mitsuba about the fact that he will make his wish come true of becoming a human. Hanako interferes with the thought, leading to Mitsuba, attacking them out of control. As the boundary was crumbling during their fight, debris was about to fall to the sleeping Yashiro and with Mitsuba's conscience, he covered her and instead, for diplomatic reasons, drags the girl, together with Hanako and Kou using the "arms" within the mirror to leave the boundary.

The trio returned to the bathroom unconscious yet safe.

Yashiro is approached by a colony of talking fish, requesting that she ingest the lifeblood of their mistress the mermaid to rewrite her contract with Hanako, becoming a princess. Although she initially refuses, she is struck by the reminder that she knows almost nothing about Hanako, and that he may only just be using her, coupled with the fact that she can get a harem in the underwater world. Approaching supernaturals for help, Yako warns Yashiro of the dangers of interacting with the Far Shore, and Tsuchigomori leaves it up to her decision, hinting that Hanako is simply afraid of her knowing about his past. Her conversation with Tsuchigomori is overheard by Hanako, who was hiding behind the curtain. At the end of the day, Yashiro refuses the fish, but they forcefully drag her into the water and tempt her into almost drinking the blood until Hanako lifts her out of the water and scares the fish away. Hanako briefly tells her how he had Tsukasa for a younger twin brother but killed him, and promises that he will tell her the rest someday, hoping for her to stay as his assistant by his side until then. Tsukasa is shown spreading rumors while Sakura scolds him for making pranks and Natsuhiko for laughing while Mitsuba watches them. Yashiro recalls the first time she screamed when Hanako responded to her knocks, and smiles as he calls out to her in a similar fashion in the toilet, no longer afraid, holding Hanako's hand.