100 years after the events in the original Jade Cocoon, the time of the Nagi people and "cocoon masters" has passed. New "cocoon masters" are now cited as "beasthunters" and are the prominent force of monster raising, with the player playing one named Kahu who visits the Temple of Kemuel in the hopes of becoming a beasthunter and having adventures like the old cocoon masters he's idolized. However, Kahu encounters trouble during his license exam required to become a full-fledged beast-hunter. He encounters a young fairy named Nico, who leaves Kahu cursed, and he's given a very short time to live before his body is consumed by evil.