Yo-Kai Watch: One day while searching for insects in the woods near the town of Springdale (Sakura New Town in the Japanese version), a boy named Nate (Keita) comes across a peculiar capsule machine next to a sacred tree. When he opens one of the capsules up, it brings forth the ghostly Yo-kai Whisper who gives Nate a special device known as the Yo-kai Watch. Using this, Nate is able to identify and see various different Yo-kai that are haunting people and causing mischief. Joined by the cat Yo-kai Jibanyan, Nate and Whisper start befriending all sorts of Yo-kai which Nate can summon to battle against more ill-intentioned Yo-kai that happen to live in his town, causing terrible trouble. He also goes on adventures around the town with his Yo-kai partners to help his human friends Bear (Kuma), Eddie (Kanchi), and Katie (Fumi-chan; also the choice for the female player character in the video games) deal with their various problems often caused by other Yo-kai.

Later on, a new girl named Inaho moves into town, being in a different homeroom class from Nate. She receives her own Yo-kai Watch and meets the space Yo-kai USApyon, who wants her help in restoring the happiness of a scientist he accidentally upset. They then open up a detective agency to investigate many Yo-kai "crimes" plaguing the city.