In Tokyo, college student Hana falls in love with an enigmatic man. The man reveals that he can transform into a wolf, and they later have two wolf children: a daughter, Yuki, and a son, Ame. Soon after, their father is killed in an accident while hunting food for the children.
Hana’s life as a single mother is difficult; Yuki and Ame constantly switch between their human and wolf forms, and Hana has to hide them from the world. After she receives noise complaints and a visit from social workers concerned that the children have not had vaccinations, Hana moves the family to the countryside away from prying neighbors. She works hard to repair a dilapidated house, but struggles to sustain the family on their own crops. With help from a strict old man named Nirasaki, she learns to farm sufficiently and becomes friends with some of the locals.
One winter day, Ame almost drowns in a river after trying to hunt a kingfisher, but Yuki rescues him, and Ame becomes more confident in his wolf abilities. Yuki begs her mother to let her go to school like other children. Hana accepts on the condition that Yuki keeps her wolf nature secret. Yuki soon makes friends at school. Meanwhile, Ame is more interested in the forest and takes lessons from an elderly fox about survival in the wild.
In fourth grade, Yuki’s class receives a new transfer student, Sōhei, who realizes something is strange about her. When he pursues and harasses her, Yuki gets angry, transforms into a wolf, and inadvertently injures him, leaving a scar on his right ear. At the meeting with their parents and teachers, Sōhei tells them a wolf attacked him, absolving Yuki of the blame. The two become friends.
Yuki and Ame fight over whether they are human or wolf. Two years later, a fierce storm gathers and Yuki’s school is let out early. As Hana is about to leave to pick her up, Ame disappears into the forest to help his dying fox teacher so she follows him. The other children are picked up by their parents, leaving Yuki and Sōhei alone. Yuki shows Sōhei that she can transform into a wolf and it was really her who attacked him. He tells her he already knew, and promises to keep her secret.
As Hana searches for Ame, she slips and falls unconscious. She sees a vision of the children’s father, who tells her that Yuki and Ame will find their own paths in life, and that she raised them well. Ame finds Hana and carries her to safety. She awakens to see Ame fully transform into a wolf and run into the mountains. She realizes he has found his own path and happily but tearfully accepts his goodbye.
One year later, Yuki leaves home to move into a junior high school dormitory. Ame’s wolf howls are heard far and wide in the forest. Hana, living alone now, reflects that raising her wolf children was like a fairy tale, and feels proud to have raised them well.