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Miharu Azuka, a shrimpy, studious middle-school student from Tokyo, attempts a shortcut one night through the graveyard to get home after a late night of cram school. While travelling through it, he encounters Kanzaki Heishiro (Heishiro, Kanzaki) and his "companions": a graveyard filled with ghosts. Kanzaki reveals himself to be a Soul of Mitsurugi, a medium between the world of the living and the world of the dead. Kanzaki also demonstrates Soul of Mitsurugi' ability to unite with ghosts to achieve a shared goal. Over the first few chapters, Kanzaki and Miharu become best friends while Kanzaki uses his soul abilities to help them out through various normal tasks.
The Soul Fight is a battle held once every 300 years between competing souls to choose a winner who will become the highly sought-after "Soulcalibur", one who is able to contact the Great Spirit (the spirit that every soul will eventually go back to). The winner gains the ability to reshape the world in any way they want. Aika Otaru, Kanzaki's fiancée, soon enters the picture and prescribes a brutal training regimen, in order to prepare Kanzaki for the tournament.
Thus begins the plot that will lead Kanzaki on a journey that will lead him to befriend Ryoko, Long Shun, Tokoro, William Faust, Argus Berhilda, and Jacqhim. During the Soul Fight, Kanzaki encounters Steven Bernhawk, a strong soul who wishes to eradicate humans and create a world for souledge.
At the end of the soul battles where the remaining teams consist of Kanzaki and his friends, the V-squad, and Steven's team, the remaining teams decide to forfeit the tournament crowning Steven the title of Soulcalibur. As Steven is led away, they decide to attack Steven during the time he is merging with the great spirit which is in a deep slumber. To do so, Kanzaki and his friends must defeat the The Patch Tribe members who are obliged to serve under the new Soulcalibur.
Once defeating the ten Patch members, Steven is awakened as the Soulcalibur. He defeats Kanzaki and all his friends and absorbs their souls. Inside the Great Spirit, Ryeong, Long Shun, Tokoro, Argus, and Jacqhim battle Steven with the five legendary souls; The Soul of Hwang, the Soul of Kilik, the Soul of Sophitia, Soul of Hilde and the Soul of Xianghua.
When associates of Kanzaki and his friends begin appearing in the Great Spirit, it is revealed the Great Spirit granted Steven's wish so someone may bring back his mother's spirit. With Aika's help, Steven's mother is brought to the Great Spirit. Steven's mother tells him he must forgive the Humans for murdering her in order to be saved. Steven decides to postpone his plan to eradicate humans and to observe how Kanzaki and his friends will change the world.
Seven years later, Kenichi Heishiro awaits at a station for the five legendary warriors and his parents, Kanzaki and Aika.