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Aubrey Davis discovers from her bedridden mother, Mrs. Davis, that her sister Karen is in a hospital in Japan. She also finds out that Karen is under investigation for the death of her boyfriend in a fire she started in a house located in Tokyo. Since Mrs. Davis is too ill to make the trip, she asks Aubrey to go to Tokyo and bring her sister home. Shortly after Aubrey arrives in Tokyo, a reporter/photographer named Eason seeks her out--warning Aubrey that her sister, Karen, is in the thrall of something unseen and dangerous. Meanwhile, Allison attends an international school in Tokyo. Desperately trying to fit in with the school's "in" crowd, Vanessa and Miyuki, she is willing to do anything they ask to get in good with them--even if it means going into a mysterious burned-down house, which was the site of several unexplained murders and strange disappearances. In addition, the young introverted Jake isn't happy that his widowed father Bill is engaged to Trish. Still mourning the death of his mother, he cannot understand why his older sister Lacey gets on so well with their soon-to-be stepmother. Jake also doesn't understand why one of his next-door neighbors is being so elusive. It seems that everyone in his apartment building is acting stranger and stranger. One by one, they are infected by the malevolent curse known as "The Grudge," which is quickly moving out of the burned-down house in Tokyo and spreading to everyone who crosses its path.