Assigning on a mission to capture a missing-nin named Mukade, Naruto Uzumaki, Sakura Haruno, Yamato and Sai wield chakra-knives, which are uniquely designed trench ones that allow a ninja to infuse their chakra with it to produce an added effect. They head for the once glorious historic ruins of Rouran, a city with one thousand towers in the middle of the desert. They pursue and corner Mukade, whose goal is revealed to travel to the past and take over the Five Great Shinobi Countries with the power of the Ryūmyaku (the Ley Line in official English translation), an ancient chakra flow deep underground Rouran. He unleashes the power of the Ryūmyaku, which is sealed by Minato Namikaze (who was well known as Konoha’s yellow flash), causing the light to engulf Naruto and Yamato, before Sai and Sakura rides on an ink bird and attempt to escape.
Naruto and Yamato are sent twenty years into the past. When Naruto awakens from this time slip, he meets the queen of Rouran, Sāra. It is later revealed that Mukade traveled to the past six years before Naruto did. Mukade changed his name to Anrokuzan and serves as the minister of Loran, who killed Sāra’s mother Sēramu, the previous queen, and Anrokuzan attempts to kill Sāra and conquer the world. Naruto decides to protect Sāra, after Anrokuzan appears and declares that he kidnapped the citizens of Rouran as slaves. With the power of Ryūmyaku, Anrokuzan creates the “Puppet Ninja Forces”, which can attack using the Ryūmyaku’s chakra, and use weapons such as kunai and deflect attacks. (Naruto uses his chakra-knife to attack them)
The past flashback shows at the grand opening of the Ichiraku Ramen Bar, that Jiraiya shows Minato Namikaze the completed Rasengan, while the young Shizune, Maito Gai, Asuma Sarutobi and Kakashi Hatake are waiting in line. Hiruzen Sarutobi sends Minato, Shibi Aburame, Chōza Akimichi and Kakashi Hatake by request, to put an end to Anrokuzan’s evil plan. Naruto sees Minato who tells him to return to his own time period, while the people of Rouran are in peril and about the circumstances at Loram, and gives Naruto his hirashin kunai to put on hold. During their conversation, Sāra recalls her childhood memory about herself and Sēramu who sings, before Anrokuzan came and stabbed her, while Sāra flees.
Anrokuzan becomes a giant puppet, using parts of the towers of Loran to repair himself from any attack, which is part of his regenerative technique with the power of the Ryūmyaku. Naruto fails to use his Shadow Clone Jutsu, Rasengan and Wind Style: Rasenshuriken to attack Anrokuzan, losing chakra and leaving defenseless, but Minato lends his chakra to Naruto with the formed Rasengan in their hands and together their chakras regenerate with each other growing more powerful and combine their powers to form the legendary Super Rasengan. Sāra seals off the Ryūmyaku to disable Anrokuzan’s regenerative technique. Minato exposes Anrokuzan’s weak spot, and Naruto successfully destroys it with the Super Rasengan. As the defeated Anrokuzan falls down into a pool of the Ryūmyaku, Yamato, who is holding on to Kakashi, arrives and uses his Wood Style Jutsu to save Naruto and Sāra. Naruto gives the kunai to Minato who uses it to completely seal off the Ryūmyaku, causing a bright blue light to shine. The people of Rouran watches Naruto and Yamato fading away from the past. After placing a seal, Minato suggests Naruto not to change history by erasing all of everyone’s memories. Naruto realizes that he and Minato are part of his past family, and Sāra tells Naruto that she will remember what Naruto taught.
Back in the present day after the Ryūmyaku and Mukade fade away, Sakura and Sai reunite with Naruto and Yamato, who had forgot their memories. As they wander outside, Naruto and the group run into someone who greatly resembles Queen Sāra and says that she had a disturbance in the Ryūmyaku, showing them the nicked and damaged chakra blade which she kept twenty years ago, and Naruto gave to Sara, during the events of the time slip. Naruto learns that it is gone from the sheath on his back. The girl says that it was a blade given to her mother by a ‘hero in a dream,’ and that the will of her mother lived on in her as she strives to protect her people. As she walks away, Naruto is contemplative and comments that she reminded him of someone he met her before.