The film opens with the bad predicting future that Naruto dies battling a monster that impales him and the Nine-Tails inside of him. A funeral is held for Naruto at his home village, where Sakura Haruno, Rock Lee, Neji Hyuga and others attended, and that Tsunade looks out at the window and asks if everything is just decided by fate.
The film’s scene returns to a few days previous, where a man named Yomi attacks a shrine to retrieve the spirit of Mōryō, a demon who attempted to conquer the world and create his “Thousand Year Kingdom”. Since he is lacking a body, Yomi offers his as a temporary substitute until they can retrieve Mōryō’s original one. The only threat to Mōryō’s plan is a priestess named Shion, who has the ability to seal his spirit away once more. He raises a stone army from their slumber to attack the rest of the world while his four subordinates go to eliminate Shion. They are given special chakra creatures to enhance their strength.
To deal with the threat, Konohagakure sends out many advance teams to stall the stone army. Naruto, Sakura, Lee and Neji are sent to guard Shion, and deliver her to the shrine where Mōryō’s body is kept. They fend off Shion’s four would-be assassins and afterwards, Shion prophesies Naruto’s upcoming death. Shion’s total acceptance of “fate”, as well as her selfish attitude, provokes Naruto into antagonizing her. As they head for the shrine, they are again ambushed by the assassins and Shion is seemingly killed. It turns out to be a ruse: the dead “Shion” is actually her servant, Taruho, acting as a decoy, by the use of Shadow Mirror Body Transfer Jutsu. This jutsu was a technique passed down in the servant’s family. After Neji tells Naruto to escort Shion to the temple alone, Shion explains that her predictions work by using others’ lives to protect her own. Naruto insists that he will survive and likewise will keep Shion safe.
Together, Sakura, Lee and Neji defeat the assassins, and at the mountain temple where Mōryō’s body is kept, Naruto and Shion find the stone army waiting. Naruto holds the army back, while Shion heads inside to begin the sealing ritual, where Yomi tricks Shion into beginning the technique with him inside the barrier, allowing Mōryō’s spirit to reunite with his body. With the stone army being destroyed by Kakashi, Shikamaru, Guy and Temari, Naruto comes to rescue her. About to see her prediction of his death come true, Shion uses her power to change Naruto’s fate. She is able to tap into her true powers, intending to kill herself and Mōryō to save her true love Naruto (for whom she has developed feelings for). Naruto stops her seconds before her death, and creates a giant Rasengan by combining Shion’s chakra with his. Naruto drives the Rasengan into Mōryō and obliterates it.
In the final scene, Naruto asks Shion what she intends to do now. She replies that Mōryō was a demon created by the dark thoughts of men, and that there is bound to be another Mōryō someday. Because of this, she says that she must continue the line of priestesses that will suppress demons like Mōryō. Shion then asks Naruto, if he will help her (a double entendre asking if he will be the father of her child), much to the shock of Sakura, Kakashi and Lee. Naruto, clueless as usual, agrees without realizing the second meaning of her question.